Hi,

I am a J-1 alien resident for tax purposes living in NJ and working in NY. In 2008 my wages came mostly from NJ (living in NJ) and part from NY (living still in NJ). My country has a tax treaty with US that allows to deduct part of wage income (5,000$) up to 2 years from federal taxes.

My questions are:
1. can deduct this 5,000$ from the NJ state tax and the NY state tax, the same way as I do from the federal return on line 21?

2. If I can deduct them in which lines of the NJ state return and NY state return should I put this non taxable money and how? (In brackets as in the federal return or with a minus sign and in which line?)

3. Since only part of my income is from NY should I deduct the 5,000$ from NY IT-203 and another 5,000$ from NJ-1040 or should I calculate the proportional amount and deduct just lets say 1,000$ from the NY IT-203 and 4,000$ from the NJ-1040?

Thank you very much for any help provided!

1) You CAN deduct the $5,000 from the NY state tax return, but NOT New Jersey, as New Jersey does NOT honor treaty exemptions.