I'm trying to file on TurboTax for my husband and myself. We both live in NJ, but he took a new job in MY at the end of last year, so we are filing for both NJ and NY. What I don't understand is why I only receive a partial credit for the taxes he paid in NY (TurboTax is saying we get credit for ~$3k of $5k paid). As a result, we owe a significant amount to NJ. I realize there is an equation that might be used to calculate, but isn't there a way to take NY's higher rate into consideration? I just want to get credit for ALL the money we paid in NY! Thanks for the help.

The credit is based on a pro-rated percentage of income earned in NY versus NJ.

So since we're always going to be filing in both (I work in NJ), does that mean we'll always be getting screwed like this? Before he took this job, I had searched this site and thought we wouldn't have to worry about being double-taxed like this.

In cases where I said do not worry about the NJ tax, the person worked the entire year in NY.

That will be the case henceforth for you, so next year you should not have any NJ tax liability.