Pennsylvania resident with NJ income

[pbp]

 I have a PA resident that has New Jersey income I understand there is reciprocity for those states.  How do I show this on the tax return to get their refund.  The program will not let me send NJ without income and Federal will not let me put in 1.00 for the state if with-holding is larger than income. 

Help please

[GodFather]

I assume the income is W2 Wages?  I thought within the New Jersey Non-Resident return, there was an option to click on the wages field, allowing you to manually change the field to Zero.  That should allow the withholdings to be refunded in total.  

This is my first year using ProSeries, so lets see what other comments you receive.  

[pbp]

You are correct the income is W-2 wages.  Not sure where you see the option to change the income. 

[GodFather]

The column on the NJ140-NR entitled Income attributed to New Jersey there is a magnifying glass near the field.  Click on the magnifying glass and change wages to zero.  

[itonewbie]

Try doing the same thing as explained in the old post but on the NJ-1040NR instead of PA return and see if that works: https://proconnect.intuit.com/community/proseries-tax-discussions/discussion/nj-resident-worked-in-p...

Just remember to attach the PA residency statement to the NJ return and submit NJ-165 to the employer.

[pbp]

The way the Company has the W-2 form it gives the same wages for New Jersey and Pennsylvania and reduces one of the states only by it's retirement reduction.  When I put it in the way the W-2 states it doubles the income.  The two state incomes do not equal the Federal income.  I have talked with the company and they will not change the W-2 just can't figure out how to make the program work they have three different amounts but the two states don't equal Federal.  Federal income is 205,000. PA is 210,00. and New Jersey is 207,00.

Tried everything I know 

[itonewbie]

If this was done properly, the employer would not have reported any wages to NJ or withheld NJ taxes.

As you may already know, NJ wages are different because NJ does not allow pre-tax deduction for retirement plan contributions. But that has nothing to so with how the returns should be filed.

Are you saying the employer had withheld both PA and NJ taxes at the same time and your client never complained?  If your client never turned in the NJ-165, the employer will not issue a W-2C; that's to be expected.  But if taxes were withheld to both states, there's something fundamentally wrong with the employer's payroll process.

As for the mechanics and technicalities of how you prepare the NJ return, please see my suggestion in the earlier post.

[pbp]

You are correct taxes were with held from both states.  If I do New Jersey and reduce the income to zero the program says can't file electronically.  If I put in 1 dollar for income it still gives me an error wages not enough for with holdings

[itonewbie]

Did you check out the thread I posted above and follow how it's done?

[pbp]

Thank you for all your responses.  I tried to do what you suggested but had no success in the end I did an over-ride of the checking and sent the return with no income I did attach a copy of the PA residency form for New Jersey  so far they have not accepted the return we shall see my other option if they reject is to print and mail.

[itonewbie]

Glad it resolved your issue. Turning off error checking is among the things you need to do.  Here's the post in the thread mentioned above, for the benefit of those who stumble upon this in the future:

https://proconnect.intuit.com/community/proseries-tax-discussions/discussion/re-nj-resident-worked-i...

[GodFather]

Is it normal for a Pennsylvania employer to show both PA Wages and NJ Wages on the same W2?  I had a client this year whose W2 showed PA wages, PA Withholdings, NJ Wages (of the exact amount), No NJ withholdings.  Due to reciprocity, you I normally do not see wages for PA and NJ on the same W2

[Accountant-Man]

Since PA  and NJ have a COMPACT stating "I won't tax yours and you won't tax mine," no employer should report both states nor withhold both states. If they do, they should hire a payroll service. 

Most of mine are NJ residents working in PA. No wages are taxable to PA, so enter PA wages and tax, file PA non resident and get all back. I always attach an Additional Info statement stating the obvious; employer messed up.

For NJ, then, file NJ resident. NJ wages line will count both PA and NJ wages from W2, so you need to check box on wage schedule to remove PA wages from being counted. Keep clicking magnifying glass on NJ wages line to get to schedule.

PA wages are rarely the same as NJ wages, unless there are zero deferrals or pre tax payments.

PA taxes all compensation, including pre tax medical, 401k and 403b deferrals. NJ taxes 403b deferrals AND pre tax medical, but does not tax 401k deferrals. 

[Accountant-Man]

Many small employers will not withhold out of state tax, so NJ residents might have to pay estimates on PA earned wages, BUT NOT PA TAX.

PA might tell these employees "don't worry, you can get a credit for PA taxes," but that's a lie. NJ won't allow a credit for improper taxes. 

[Accountant-Man]

Don't forget that many localities in PA have an earned income tax, usually 1% or 0.5%, and that's not PA tax. NJ gives a tax credit for that, since they give credit for taxes paid to "other jurisdictions," not just other "states."

[pbp]

Many thanks to all who have helped me....

[GodFather]

Thanks for confirming my thoughts.  I live in a town in Pennsylvania that borders New Jersey.  I have many clients who live in one of those states and work in the other.  I've been handing my resident and non-resident returns exactly as you mention.  This is the first year that I've had two clients showing both PA and NJ wages on their W2.  Normally, it's one or the other but never both.  

[pbp]

I submitted the NJ on the 18th but have not had it accepted yet.  Does anyone know if NJ is behind on accepting g returns.  All other states I submitted on the last day have been accepted.