Hi,

I was working in Maryland from January to December 15 2007. On Decemeber 16, I moved to Hoboken, New Jersey, and started a new job in New York city on December 17 until now.

I need to file MD, NJ, and NY state taxes. 3 months ago, I was told by an attorney that I will pay no NJ state taxes because NY state taxes are higher than NJ state taxes, and I will get a NJ state tax credit for taxes paid to other jurisdictions. However, when I was working on my state tax forms this past weekend. I realized that even with the total tax credits I received as a result of the taxes paid to MD and NY, I still need to pay NJ state taxes. It was not completely nullified. The problem seems to lie in that the IRA deduction which is tax-deductible on my federal return, is not tax-deductible on my NJ state tax return. As a return, I could not nullify all my NJ state tax using the taxes paid to MD and NY state taxes. Am I missing something here?

Please help.

Let's check that you are treating your income properly - on NJ1040 does line 14 include income from only from your NY job after you moved to NJ in December? As a part year resident you do not incude any income from prior to Dec 16. You state that you included MD taxes paid on line 39 - that's incorrect, since you should not be reporting any MD income (or taxes paid) to NJ. Please recheck this.