NJ self employed part year

[bstaxes]

Client was a resident for 2 month in NJ and then moved to Pa. Client was self-employed salesman. NJ requires copy of Fed Sch c. That is the full year. I'm thinking of either doing a Fed sch c for just the time he was a NJ resident and attach that, or writting an explaination with the return. Pa does not require Fed Sch c. Any help, ideas or thoughts would be great.

[nynjtaxman]

You can adjust the amount that is allocated to PA so, the remaining is taxed on the NJ 1040 ( mark as part year).

Jump to the worksheet from the NJ 1040, on the line where the Sch C amount shows, and make the adj.

[jainen]

>>doing a Fed sch c for just the time he was a NJ resident<<

Like most states, New Jersey calculates tax based on world-wide income and then prorates that. So you do in fact need the federal numbers. Pennsylvania allows you to allocate income before you calculate the tax, if you have separate bookkeeping for Pennsylvania.

[nynjtaxman]

The NJ 1040 has 2 columns, one for fed and one for NJ source. You just adj the NY source amount to reflect what was earned in NJ. The tax is cal on the entire fed amount but then ratioed to reflect the actual amount earned in NJ.

[bstaxes]

On the NJ res return there is only one column so I can't adjust it, unless I override the number and then it will not agree with the Fed sch C. I feel like I am brain dead or better still no brain.

[nynjtaxman]

I'm sorry about the 2 columns statement about the NJ 1040, it's the NJ 1040NR that has 2 columns. On the NJ 1040, on line 17( bus income) use the jump to. It brings you to a worksheet. On the sheet look for subtractions and enter the amount earned in PA. The rest will remain on the NJ.