Dear John and Katie,
We thank you very much for your advice.

Val and O.

<< -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << ------------------------------------------------->

Val wrote:

- quote -

You will file part-year resident returns with DE and NJ. In
NJ (and probably in DE too, I just haven't looked), you will
compute your tax liability as if you had been residents for
the entire year, and then prorate the tax by the ratio of NJ
income (all income received while you were NJ residents,
plus any NJ source income received before you became NJ
residents) to total income. The result is to tax your NJ
income at the same average rate that would have applied if
you had been full-year residents. I believe DE also has
graduated income tax rates and applies a similar
methodology.

Unless you had income from DE sources after you moved to NJ
(e.g., deferred compensation for services that were
performed in DE), or NJ source income received while you
were still in DE, there should be no overlap between the
income taxed by each of those states. If there is overlap,
the state where you were a resident when the income was
received will allow you credit for the tax you pay on that
income to the source state.

You will also file a nonresident return in NY. Your NY
source income will be your spouse's earnings from services
performed in NY. (If he or she worked at home part of the
time, NY considers that part of the compensation also to be
NY source income.) NJ will allow credit for the tax you pay
to NY, limited to the proportion of your NJ tax liability
that relates to the "double taxed" income.

Because of the part-year resident situation you may have
trouble getting a tax preparation program to allow the
credit. I know I have to force it in Turbo Tax to get the
part-year California resident return homework problem I give
my graduate students to work right.

Katie in San Diego

The foregoing is intended for educational purposes only and
does not constitute legal or professional advice.

<< -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << ------------------------------------------------->

- quote -

You'll file as a part year resident in both DE & NJ. You'll
file as a non-resident in NY.

The forms & instructions may be found, for each state, using
this link:

http://www.taxadmin.org/fta/link/FORMS.html

"Jack" - John H. Fisher - TaxService[at]aol.com
Philadelphia, Pa - Atlantic City, NJ - West Wildwood, NJ
My Newsgroups & Boards at: http://members.aol.com/TaxService/index.html

Where Ignorance is bliss, 'tis folly to be wise!=

<< -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << ------------------------------------------------->

We were wondering if you could comment on the case briefly
presented below (any advice you might have for us, order
of operations in the filing process, etc.). The percentages
refer to the how much we earned in each state out of the
total for 2004.

__________________________________________________ ____
| Period | Residence | Work(spouse)| Work(myself)|
|_____________ ___________ _____________ _____________
|
| first 5 mos.| DE | none | DE [18%] |
|_____________ ___________ _____________ _____________
|
| last 7 mos. | NJ | NY [57%] | DE [25%] |
|_____________|___________|_____________|_________ ____|

Thank you much for your input.

Val.

<< -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << ------------------------------------------------->