Credit for Income Taxes Paid to Other 

 Jurisdictions (Wage Income) 

 Understanding Income Tax 

    New Jersey’s flower is the Meadow Violet. 
 
Purpose of This Publication ................................................................................................................................. 3 

Purpose of the Credit ............................................................................................................................................ 3 

Components of the Credit Calculation ................................................................................................................ 3 

 Jurisdiction .................................................................................................................................................................................................. 4 

 Income Actually Taxed by Another Jurisdiction ............................................................................................................................ 4 

 Income Sourced to Another Jurisdiction v. “Worldwide Income” ..................................................................................... 4 

 Income Allocations Allowed by the Other Jurisdiction .......................................................................................................... 5 

 Adjustments (Deductions) Allowed by the Other Jurisdiction ............................................................................................ 5 

 Income Subject to Tax by More Than One Jurisdiction Within One State ..................................................................... 5 

 Income Properly Taxed by Another Jurisdiction ........................................................................................................................... 5 

 Income Properly Taxed ...................................................................................................................................................................... 5 

 Income Not Properly Taxed ............................................................................................................................................................. 6 

 Dual State Residents ........................................................................................................................................................................... 6 

 Income Actually Taxed by Both NJ and Another Jurisdiction .................................................................................................. 7 

 Income Taxable in Another Jurisdiction Exempt From Tax in NJ ....................................................................................... 7 

 Other Jurisdiction’s Additions to Income ................................................................................................................................... 7 

 Income Taxed by New Jersey ............................................................................................................................................................... 7 

 Actual Tax Paid to the Other Jurisdiction ........................................................................................................................................ 7 

 Actual Tax Paid on Income Taxed by More Than One Jurisdiction in a State Outside NJ ....................................... 7 

How to Claim the Credit ....................................................................................................................................... 8 

Proportional Credit Limitation Formula ............................................................................................................. 8 

Completing More Than One Schedule NJ-COJ .................................................................................................. 8 

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 Credit for Income Taxes Paid to Other Jurisdictions  
  (Wage Income) 
  Understanding Income Tax 

Part-Year Residents ............................................................................................................................................... 9 

Income From New York ........................................................................................................................................ 9 

Income From Pennsylvania ................................................................................................................................ 10 

 Income From Pennsylvania Municipalities ................................................................................................................................... 10 

 Wages From Philadelphia .............................................................................................................................................................. 10 

Changes Due to Audit by Other Jurisdictions .................................................................................................. 12 

If You Are Audited By New Jersey ..................................................................................................................... 13 

Estimated Tax Payments..................................................................................................................................... 13 

Jurisdiction Code ................................................................................................................................................. 13 

List of Examples ................................................................................................................................................... 14 

Connect With Us. ................................................................................................................................................. 57 

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                 Credit for Income Taxes Paid to Other Jurisdictions  
                                             (Wage Income) 
                                        Understanding Income Tax 

Purpose of This Publication 

Resident taxpayers who paid Income Tax both to New Jersey and to an out-of-state jurisdiction in the same tax 
year may be eligible for a credit against the tax they owe to New Jersey. A taxpayer can be an individual, an 
estate, or a trust that pays Income Tax to another jurisdiction. The income can be earned from a business, an S 
corporation, or through self-employment. 

This publication explains: 

     How to determine what income you can include in the credit calculation; 

     When you are eligible to claim a credit for taxes paid to another jurisdiction;  

     How to calculate the credit amount you are eligible to claim. 

The examples provided illustrate how to determine the tax credit in both simple and complex situations.  

(See our companion publication, Credit for Taxes Paid to Other Jurisdictions (Business/Nonwage Income), 
for examples of how to calculate the tax credit on business/nonwage income.) 

Purpose of the Credit 

This credit minimizes double taxation of income that is already taxed by other jurisdictions. Your credit will either 
be the amount of New Jersey Income Tax that you would have paid if the income had been earned in New Jersey, 
or the amount of tax actually paid to the other jurisdiction, whichever is less. 

These are the statutory limitations: 

 1. The  income  must  have  been  taxed,  in  the  same  tax  year,  byboth     New  Jersey  and  another  qualified 
      jurisdiction (see Jurisdiction ); and  

 2. The  credit  cannot  exceed  the  proportional  credit  limitation.  (See    Proportional  Credit Limitation 
      Formula.) 

Components of the Credit Calculation 

Before you can calculate any credit for taxes paid to another jurisdiction(s), you must understand the components 
of the credit calculation. You must also know how to determine each of those components for each jurisdiction 
and for each tax that you are claiming a credit. You must determine: 
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                  Credit for Income Taxes Paid to Other Jurisdictions  
                                             (Wage Income) 
                                       Understanding Income Tax 

     What constitutes a jurisdiction; 

     Income actually taxed  by the other jurisdiction; 

     Income properly taxed  by another jurisdiction; 

     Income actually taxed by both New Jersey and the other jurisdiction; 

     Income taxed by New Jersey; 

     Actual tax paid to the other jurisdiction. 

Jurisdiction 
This is any state of the United States other than New Jersey, a political subdivision (e.g., county or municipality) 
of any state other than New Jersey, or the District of Columbia. You are not allowed to claim a credit for taxes 
paid to the U.S. government, Canada, Puerto Rico, or to any foreign country or territory.  

Income Actually Taxed by Another Jurisdiction 
Generally,  this  is  the  income  sourced  to  the  other  jurisdiction,  after  any  adjustments  allowed  by  the  other 
jurisdiction but before deducting personal exemptions and standard or itemized deductions. 

Income Sourced to Another Jurisdiction v. “Worldwide Income” 
Some jurisdictions require you to determine the actual amount of tax due. First, you calculate a base tax on your 
total income from all sources (worldwide income) as if you were a resident of that state. Second, divide the 
amount of income sourced to the other state by worldwide income, which gives you a percentage. Then, multiply 
the base tax by the percentage you calculated. 

This method of tax calculation may result in you having higher tax liability in the other jurisdiction. However, it 
does not increase the amount of income subject to tax by the other jurisdiction. The other jurisdiction actually 
taxes only the income sourced to that state, and not worldwide income. (See example 6.) 

As the New Jersey Tax Court stated in Chin v. Director, 14 NJ Tax 304 (Tax Ct. 1994): “It is clear that the use of the 
plaintiff’s non-New York income in determining the tax rate to be imposed on his spouse’s New York source 
income did not constitute taxation of that non-New York income. Accordingly, the Director properly excluded 
the non-New York income from the numerator of the resident credit fraction because it was not subject to tax in 
New York….” 

The worldwide income is used to determine the tax rate to be imposed on income sourced to the jurisdiction, 
but not actually taxed. Thus, only income actually sourced to the other state can be included on line 1, Schedule 
NJ-COJ. (See Chin v. Director.) 

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             Credit for Income Taxes Paid to Other Jurisdictions  
                                     (Wage Income) 
                                     Understanding Income Tax 

Income Allocations Allowed by the Other Jurisdiction 
A jurisdiction may allow income to be allocated when it is earned partly inside and partly outside the state. For 
example, wages may be allocated using a ratio of days worked in the state over days worked everywhere. Since 
the allocation of time worked in the state reduces the wages taxed by the other jurisdiction, you must take that 
into consideration when determining the income actually taxed by the other jurisdiction. (See example 7.) 

Adjustments (Deductions) Allowed by the Other Jurisdiction 
In some cases, a jurisdiction does not allow subtractions or deductions from income. Do not include on line 1, 
Schedule NJ-COJ any expenses allocated to the other jurisdiction that were used to reduce the income on line 2 
but were not allowed in the other jurisdiction. Examples can include interest paid to finance the purchase of an 
interest in a partnership and expenses paid by the partner that were not reimbursed by the partnership. They are 
not permitted as deductions in some states, but can be used to reduce taxable income in New Jersey. (See 
example 8.)  

Income Subject to Tax by More Than One Jurisdiction Within One State 
You can report income only once on the Schedule NJ-COJ. You can make only one credit calculation on Schedule 
NJ-COJ when the same income is taxed by one or more jurisdictions within the same state, and the amount of 
income taxed by each jurisdiction is the same. (See example 4.)  

When the same income is taxed by one or more jurisdictions within the same state and the amount of income 
taxed by each jurisdiction is different, you must use separate Schedule NJ-COJ’s to make your calculations. One 
credit is based on the amount of income taxed by all the jurisdictions. The other credit is based on the difference 
between the amounts taxed by each jurisdiction (excess income). 

For example, you earned wages of $15,000 in a city in another state. After adjustments, $9,000 of that income 
was taxed by the other state. However, the entire $15,000 was taxed by the city. The amount of excess income is 
$6,000. In such a case, you must make two credit calculations. The first calculation determines the credit allowed 
on the $9,000 taxed by all the jurisdictions; the second calculation determines the credit allowed on the $6,000 
of excess income. (See example 9.) 

Income Properly Taxed by Another Jurisdiction 
You can include only income properly taxed by another jurisdiction in the credit calculation.   

Income Properly Taxed 
In general, another jurisdiction may properly tax a nonresident’s income from: 

  Services rendered within that jurisdiction; 

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                      Credit for Income Taxes Paid to Other Jurisdictions  
                                               (Wage Income) 
                                       Understanding Income Tax 

      Net  profits from  a  business,  trade, or  profession  carried  on  within  that  jurisdiction,  including  interest 
       earned by the business, etc.; 

      A partnership or S corporation as allocated to that jurisdiction; 

      Real property (such as real estate) or tangible personal property (such as furniture, jewelry and art) located 
       in that jurisdiction; 

      Gambling in that jurisdiction; 

      Estate or trust distributions that were derived from any of the above types of income located, allocated, 
       or rendered within that jurisdiction. 

Income Not Properly Taxed 
A nonresident’s personal income from interest, dividends, or gains from intangible personal property         is not 
properly taxable by another jurisdiction. If you are a nonresident, income from interest, dividends, or gains from 
intangible personal property (such as life insurance or securities investments) that was derived from a business, 
trade, or profession carried on in the other jurisdiction   properlyistaxable by that jurisdiction. For example, 
interest on a personal savings account in a bank located in another jurisdiction is not properly taxable by that 
jurisdiction. In addition, other jurisdictions cannot tax you on most retirement benefits, including distributions 
from deferred compensation plans, (e.g., 401(k) Plans, 457 Plans) and IRAs. (See example 10.)  

If you reported and paid tax to another jurisdiction on income not    properly taxable by that jurisdiction, you must 
follow the other jurisdiction’s procedures for requesting any refund due. 

Dual State Residents 
If you are considered to be a resident of both New Jersey and another state for the same period, you can claim 
a credit based on all income taxed on both the New Jersey and the other state’s resident returns, except     for any 
income allocated to New Jersey. For example, any S corporation or partnership income allocated to New Jersey 
cannot be included in the credit calculation. 

When the same income is reported to two states, other than New Jersey, that income is included only once on 
Schedule NJ-COJ.  

Example: An individual is a resident of both New York and New Jersey and has a business in Connecticut. They 
pay tax to Connecticut on their business income. They must also report that income on both the New Jersey and 
New York resident returns. They must claim a credit on the New York return for the tax paid to Connecticut. They 
also must claim a credit on the New Jersey return for the tax paid to Connecticut. They cannot claim a credit for 
New York tax because they did not pay tax to New York on this income. 

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               Credit for Income Taxes Paid to Other Jurisdictions  
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                                     Understanding Income Tax 

Income Actually Taxed by Both NJ and Another Jurisdiction 
Income Taxable in Another Jurisdiction Exempt From Tax in NJ 
Income must be taxed by both New Jersey and the other jurisdiction to be included on Schedule NJ-COJ. For 
example, unemployment compensation may be taxed by another jurisdiction but it is not taxable by New Jersey 
so you cannot include this income on line 1 of Schedule NJ-COJ. 

Other Jurisdiction’s Additions to Income 
The other jurisdiction may require additions to income that are not required by New Jersey and, therefore, are 
not reported on the New Jersey return. For example, a depreciation adjustment might be added to the business 
income taxed by the other jurisdiction. However, if the adjustment is not required or reported on the New Jersey 
return, it cannot be included in the credit calculation. (See Adjustments (Deductions) Allowed by the Other 
Jurisdiction.) 

Income Taxed by New Jersey 
Enter on Schedule NJ-COJ, line 2, the New Jersey Gross Income amount reported on Form NJ-1040, line 29. This 
is  the  total  of  all  income  reported  on  the New Jersey  return  after  any pension  or  other  retirement  income 
exclusion but before exemptions and deductions. (See example 1.)  

Actual Tax Paid to the Other Jurisdiction 
The actual tax paid to the other jurisdiction is the amount of tax that is due after deducting all tax credits allowed 
by that jurisdiction (e.g., child and dependent care, new job, research and development), but before the deduction 
of any payments made, such as withholdings, estimated payments, extension payments, credit for pass through 
entity tax payments, or an overpayment from a prior year. 

If the same income was taxed by both a state and a jurisdiction within that state, the actual tax paid is the total 
tax paid to the state plus the tax paid to the jurisdiction on that income. 

Actual Tax Paid on Income Taxed by More Than One Jurisdiction in a State Outside NJ 
There may be situations in which a state and one or more jurisdictions within that state tax differing amounts of 
income. When calculating a credit in those instances, you must complete a separate Schedule NJ-COJ for each 
jurisdiction. You can report only the actual tax paid to the other jurisdiction(s) on the amount of income reported 
on line 1 of your Schedule NJ-COJ. To prorate the tax paid to the other jurisdiction, divide the amount of income 
on line 1 by the total amount of income taxed by that jurisdiction. Apply the resulting percentage to the total tax 
paid to the other jurisdiction. (See example 9.) 

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                      Credit for Income Taxes Paid to Other Jurisdictions  
                                         (Wage Income) 
                                     Understanding Income Tax 

How to Claim the Credit 

You must do the following to claim credit for taxes paid to another jurisdiction: 

 1. Complete      Schedule NJ-COJ in its entirety. You may have tocomplete more than one Schedule NJ-COJ 
    in certain situations. Fiduciaries of a resident estate or trust must complete Schedule C, Form NJ-1041;  

 2. Complete Worksheet I in the NJ-1040 Instructions if eligible to receive a property tax deduction or credit; 

 3. Enclose Schedule NJ-COJ(s) with the NJ-1040 Income Tax return. 

Proportional Credit Limitation Formula 

The proportional credit limitation (PCL) amount represents the amount of Income Tax New Jersey would have 
imposed if the income you earned in the other jurisdiction had been earned in New Jersey. 

The PCL is calculated by dividing the income actually taxed by both New Jersey and the other jurisdiction (a) by 
the income subject to New Jersey tax (b). Multiply the resulting percentage by the tax calculated on the total 
New Jersey taxable income (c). The formula is: 

                                                 a 
                                                   b ×  c  =  PCL 
                                                
You then must compare the PCL amount to the actual tax paid to the other jurisdiction. You can claim a credit of 
the lesser of the two amounts. (See examples 2and    .)3

Completing More Than One Schedule NJ-COJ 

Complete a separate Schedule NJ-COJ for each jurisdiction for which you are claiming a credit, or for each tax 
imposed by a jurisdiction. You must file separate schedules when: 

   Two  or  more  jurisdictions  (i.e.,  a  state  and  political  subdivision(s)  therein  –  such  as  counties  or 
    municipalities) tax the same income.For example, when both a state and a city within that state tax the 
    same   income, you may have to complete and enclose a separate Schedule NJ-COJ for each jurisdiction. 
    (See example 4); 

   Different jurisdictions tax different income.  For example, if you had wages from State A and a gain from 
    the sale of property from State B, you must complete a separate Schedule NJ-COJ for each state; 

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                   Credit for Income Taxes Paid to Other Jurisdictions  
                                             (Wage Income) 
                                    Understanding Income Tax 

   The same jurisdiction imposes more than one type of tax.    For example, if you had wages and business 
    income from a  city that imposes both a  wage tax and a  different tax on business income, you must 
    complete one Schedule NJ-COJ for the wage tax and a separate Schedule NJ-COJ for the tax on business 
    income. 

Part-Year Residents 

A part-year resident is a New Jersey resident for only part of the tax year. If you are a part-year resident who is 
required to file a New Jersey Resident Income Tax return, you must report on that return all the income received 
during your period of New Jersey residency, whether the income was from inside or outside New Jersey. If you 
received income from New Jersey sources during your period of nonresidency, you also may be required to file 
a part-year nonresident return with New Jersey. (See  Part-Year Residents and Nonresidents to determine if 
you need to file a return.) 

Part-year residents may be able to claim a credit for taxes paid to other jurisdictions. You must have been a part-
year resident who paid Income Tax both to New Jersey and to an out-of-state jurisdiction on income that is 
reported on the part-year resident return. You may be eligible to claim a credit as long as the income was derived 
from the other jurisdiction during the period of time you were a New Jersey resident, and is actually and properly 
subject to tax in both the other jurisdiction and New Jersey. As a part-year resident, you should use the same 
criteria and methodology as full-year residents to determine the components of the credit calculation and the 
credit amount. 

For more information on the filing responsibilities of part-year residents and part-year nonresidents, see the 
instructions for the New Jersey resident return (Form NJ-1040) and nonresident return (Form NJ-1040NR), or 
see Part-Year Residents.    (See examples 11 and 12.) 

Income From New York 

If you are a New Jersey resident who works in New York or earns other taxable income there, you are often taxed 
on an amount less than your actual New York source income as a result of the deductions allowed by New York. 
When calculating a credit for taxes paid to New York, you should only use the income actually taxed by New York 
in the calculation. Because of New York’s method of calculating a nonresident taxpayer’s tax, it is not possible to 
identify one particular line on the New York tax return that represents the income subject to tax in New York.  

Do  not  use  the  “worldwide  income”  column  in  the  credit  calculation.  (See Income  Sourced  to  Another 
Jurisdiction v. “Worldwide Income”.) 
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                  Credit for Income Taxes Paid to Other Jurisdictions  
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                                     Understanding Income Tax 

Follow the New York State Nonresident Return (Form IT-203) instructions carefully to ensure that you include the 
correct items and amounts of income in the New York State Amount column. If you complete the New York IT-
203 correctly, the income (or loss) reported in the New York State Amount column will only include income 
earned from sources in that state and properly taxable to that state. 

Items such as interest earned from a New York bank account or dividends paid by a New York corporation are 
not taxable in New York unless such income is from property used as part of trade, business, profession, or 
occupation carried on in that state. 

Income From Pennsylvania 

Pennsylvania and New Jersey have a Reciprocal Personal Income Tax Agreement. That means wages, salaries, 
and other compensation paid to New Jersey residents employed in Pennsylvania are not subject to Pennsylvania 
income tax. Residents of each state pay taxes to their state of residency, not to the state where they work. Thus, 
a New Jersey resident cannot claim a credit for taxes paid to Pennsylvania on employee compensation because 
the earnings are not subject to tax in Pennsylvania. 

If you are a New Jersey resident, and Pennsylvania tax is withheld from your wages in error, you must file a 
Pennsylvania nonresident return to receive a refund. To stop the withholding of Pennsylvania income tax, you 
must  complete  a Pennsylvania  Employee's  Nonwithholding  Application  Certificate  and  give  it  to  your 
employer. You can get this form from the Pennsylvania Department of Revenue. 

The Reciprocal Agreement covers only  employee compensation (wages, tips, fees, commissions, etc.). If you are 
self-employed or receiving income other than wages (e.g., gain from the sale of property) that is taxable in both 
states, you can claim a credit for taxes paid to Pennsylvania on that income. We do not allow a credit for taxes 
paid in error to Pennsylvania on employee compensation. (See example 13.) 

Income From Pennsylvania Municipalities 
The New Jersey/Pennsylvania Reciprocal Agreement does not apply to the income or wage tax imposed and 
collected by the City of Philadelphia or any other municipality in Pennsylvania. Therefore, you can include in the 
credit calculation income subject to both New Jersey Income Tax and the wage or income tax imposed by a 
Pennsylvania municipality. 

Wages From Philadelphia 
New Jersey residents earning wages in Philadelphia can determine the income to enter on line 1 of Schedule NJ-
COJ, by dividing the wage tax deducted (as reported in the “Local income tax” box on the W-2) by the Philadelphia 
nonresident tax rate as follows: 
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                    Credit for Income Taxes Paid to Other Jurisdictions  
                                            (Wage Income) 
                                     Understanding Income Tax 

                     Philadelphia Wage Tax Paid* 
                    Philadelphia Wage Tax Rate    =  Line 1, Schedule NJ-COJ 

The amount reported on line 1 cannot be more than the amount of Philadelphia wages included on line 15, Form 
NJ-1040. You must use the exact amount of Philadelphia wage tax reported on the W-2 when performing this 
calculation. Do not round the figure either up or down. (Seeexample 14.) 

In addition, if you contribute to a 401(k) Plan, you may need to adjust line 1 and box 9a of Schedule NJ-COJ. 

Unlike wages reported for New Jersey tax purposes, the amount of wages reported for Philadelphia include the 
401(k) amount. Accordingly, wages from Philadelphia that are available for a credit from New Jersey must be 
decreased for the Schedule NJ-COJ using the following calculations: 

             New Jersey wages reported 
             + 401(k) amount____________ 
             New Jersey wages with 401(k) 

             Philadelphia wages with 401(k) 
                New Jersey wages with 401(k)      =  Percentage of 401(k) in Philadelphia wages 

             Percentage of 401(k) in Philadelphia wages 
             × 401(k) amount_________                        ___ 
             401(k) in Philadelphia wages 

             New Jersey wages reported 
             (Less 401(k) in Philadelphia wages) 
             Income Eligible for Philadelphia – Enter this amount on Schedule NJ-COJ, line 1 

According to the law, when there is a reduction on line 1, Schedule NJ-COJ, there must be a corresponding 
reduction in the allowable tax paid. 

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               Credit for Income Taxes Paid to Other Jurisdictions  
                                         (Wage Income) 
                           Understanding Income Tax 

Therefore, you must adjust the tax paid to Philadelphia to reflect the amount of income eligible for a credit. Then, 
you can determine the maximum credit allowed using the following calculation: 

        Income Eligible for Philadelphia 
        Income Taxed by Philadelphia            =  Percentage of Philadelphia income eligible for credit 

        Percentage of Philadelphia income Eligible for Credit 
        × Taxes paid to Philadelphia________                        ___ 
        Prorated Taxes paid to Philadelphia – Enter this amount on Schedule NJ-COJ, box 9A 

Refund of Wage Tax Paid to Philadelphia  
If you filed a Philadelphia Petition for Wage Tax Refund, you must subtract your refund from the Philadelphia 
wage tax paid: 

               Taxes Withheld for Philadelphia 
               (Less Refund)___________________ 
               Total Taxes Paid to Philadelphia – Enter this amount on Schedule NJ-COJ, box 9A 

Divide Total Taxes Paid to Philadelphia by the Average Philadelphia Tax Rate (3.44%) to determine the income 
taxed by Philadelphia. Report this income on line 1 of Schedule NJ-COJ. 

If you file the Philadelphia Petition for Wage Tax Refund after you file your NJ-1040 and you receive a refund of 
Philadelphia withholding, you must file an amended return, Form NJ-1040X, with the corrected wages and taxes 
paid, as calculated above. 

Changes Due to Audit by Other Jurisdictions 

When an audit by another jurisdiction changes the amount of previously reported tax paid, it will result in an 
adjustment to the credit you claimed on your New Jersey return. You are required to file an amended New Jersey 
return, Form NJ-1040X, for the year(s) affected by the audit and pay any amount due. If the audit results in an 
overpayment, you can request a refund “regardless of any otherwise applicable statute of limitations,” provided 
you claimed the credit for that state or municipality on your original return. N.J.S.A. 54A:4-1(e).  

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                   Credit for Income Taxes Paid to Other Jurisdictions  
                                       (Wage Income) 
                                   Understanding Income Tax 

If You Are Audited By New Jersey 

New Jersey does not require you to enclose a copy of the income tax return(s) filed with the other jurisdiction(s) 
if you file a paper return. However, you should keep complete copies of any returns filed with other jurisdiction(s). 
If we audit your return, you will be asked to provide: 

 (a) A complete copy of the income tax return(s) filed with the other jurisdiction(s), if one was filed or required 
     to be filed, along with schedules, worksheets, etc., that show the nature and source of the income being 
     taxed;  

 (b) Documentation to prove you participated in a composite return filed in another jurisdiction. This can 
     include a statement on the filing entity’s letterhead that lists the jurisdiction, your share of the income 
     taxed by the other jurisdiction, and your share of the tax paid; 

 (c) The following if you were not required to file a return with the other jurisdiction:  

      A W-2 that lists the wage taxes paid and the name of the taxing jurisdiction;  

      A statement from the business entity that filed a tax return based on income that lists your share of 
       the income taxed by the other jurisdiction. It should include the name of the tax, and your share of the 
       tax paid (e.g., Philadelphia Net Profits Tax, New York City Unincorporated Business Tax). 

Estimated Tax Payments 

Individuals and certain estates and trusts who expect their New Jersey Income Tax liability to be more than $400 
are required to make quarterly estimated tax payments. Use Form NJ-1040-ES to file estimated tax payments 
when due. (For more information on estimated taxes, see Estimating Income Taxes.)  

Jurisdiction Code 

If you are a New Jersey resident claiming a credit, you are required to enter on line 44, Form NJ-1040, a two-digit 
code for the jurisdiction for which you are claiming a credit. For more information see the NJ-1040 instructions. 

Civil Unions. Any reference in this bulletin to a spouse also refers to a spouse who entered into a valid same-sex 
marriage in another state or foreign nation and a partner in a civil union recognized under New Jersey law. 
                             
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List of Examples 

1. Determining line 2, Schedule NJ-COJ. 

2. Determining the credit when the amount of tax paid to the other jurisdiction exceeds the proportional credit 
   limitation amount. 

3. Determining the credit when the amount of tax paid to the other jurisdiction is less than the proportional 
   credit limitation amount. 

4. Determining the credit for income taxed both by another state and by a city within that state when the state 
   and city are taxing the same amount of income.* 

5. Determining the credit when income is taxed by two different states outside New Jersey. 

6. Determining line 1, Schedule NJ-COJ when the other jurisdiction uses income from all sources to determine 
   the tax due.  

7. Determining line 1, Schedule NJ-COJ when you allocate your income in the other jurisdiction. 

8. Determining line 1, Schedule NJ-COJ when the other jurisdiction allows an adjustment to (reduce) income that 
   is not allowed by New Jersey.  

9. Determining the credit for income taxed both by another state and by a city within that state when the city 
   taxes more income than the state. 

10. Determining line 1, Schedule NJ-COJ when part of New Jersey income is taxed by the other jurisdiction. 

11. Determining the credit when a part-year resident moves to New Jersey during the tax year and continues to 
    work outside New Jersey.* 

12. Determining the credit when a part-year resident who lived and worked in another state moves to New Jersey 
    and changes jobs to a New Jersey employer.  

13. Determining the credit for income, other than wages, earned in Pennsylvania.* 

14. Determining the credit for wage income earned in Philadelphia.* 

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            Credit for Income Taxes Paid to Other Jurisdictions  
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             Understanding Income Tax 

15. Determining line 1, Schedule NJ-COJ when the other jurisdiction allows an adjustment to (reduce) income 
    that is not allowed in New Jersey, and when the other jurisdiction taxes income that is not taxed by New 
    Jersey. 

    * Example includes the property tax deduction/credit calculation (Worksheet I). 

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                             Understanding Income Tax 

 Example #1 – Determining line 2, Schedule NJ-COJ. 
 The amount from line 2, Schedule NJ-COJ, is taken directly from line 29 of the New Jersey resident return 
 (Form NJ-1040). This is your New Jersey gross income before personal exemptions and deductions. It includes 
 the taxable portion of all pension or annuity payments, and/or IRA withdrawals, after    you have subtracted 
 any pension and/or other retirement income exclusions allowed by New Jersey. 

                             Income Subject to Tax by New Jersey 

                             Taxpayer A               Taxpayer B 
                             Without Pension          With Pension Less Exclusion(s) 
Wages                         70,000                             0 
Interest                      250                      4,000 
Dividends                     400                      2,500 
Gains                         0                        1,525 
Pension/Annuity/IRA           0                                               60,000 
Pension Exclusion                   0                                            (30,000) 
Taxable Pension               0                        30,000 
S Corporation                 21,000                             0 
Income Subject to Tax Before $91,650                  $38,025 
Exemptions and Deductions 

                                                                                           GIT-3W 
                                                                                          January  2024 
                                                                                          16 
                                                       

       Credit for Income Taxes Paid to Other Jurisdictions  
                                   (Wage Income) 
                                   Understanding Income Tax 

 Example  #2  –  Determining  the  credit  when  the  amount  of  tax  paid  to  the  other 
       jurisdiction exceeds the proportional credit limitation (PCL) amount. 
 A resident taxpayer lives in New Jersey but works primarily in another state. Their only income for the year 
 consisted of $115,000 in wages, $105,000 of which was earned in, and taxed by, the other state. Their tax 
 liability to the other state, $4,900, exceeds the PCL amount from line 8, Schedule NJ-COJ. Therefore, their 
 credit is $4,689, the PCL amount. 

                                                 Income Subject to Tax   
                                                                         
                                    _New Jersey_  _Other Jurisdiction_  _Both_ 
 Wages                              115,000                 105,000     105,000 
 Income Subject to Tax Before       115,000                 105,000     105,000 
 Exemptions and Deductions 
                                                                        
 Less Exemptions                       (1,000) 
 Taxable Income                     114,000                             
 (From Line 39, Form NJ-1040) 

 Tax                                5,136                   4,900       

 Line 1, Schedule NJ-COJ                                                105,000 
 
                                                                         GIT-3W 
                                                                        January  2024 
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                  Credit for Income Taxes Paid to Other Jurisdictions  
                                                   (Wage Income) 
                                          Understanding Income Tax 

 Example #2 – continued 

 They are not eligible for a property tax deduction/credit, so they complete only column B of Schedule NJ-
 COJ as follows: 

 Schedule NJ-COJ                          Credit for Income or Wage Taxes Paid                                 
                                          to Other Jurisdiction 

    Income properly taxed by both New Jersey and other jurisdiction. (Instructions page 32) 
    Jurisdiction Name: ______________________State X____________________________________________ 
 1. 
    Do not combine the same income taxed by more than one jurisdiction. 
    (The amount on line 1 cannot exceed the amount on line 2.)                                   1. 
                                                                                                     105,000 
 2. Income subject to tax by New Jersey (From line 29, NJ-1040)                                  2. 
                                                                                                     115,000 
 3. Maximum allowable credit percentage. Divide line 1 by line 2. (Instructions page 33)         3. 
                                                                                                     91.3043% 
 See page 25 to determine if you are eligible for a property tax  
                                                                               Column A              Column B 
 benefit. If you are not eligible, only complete column B. 

 4.  Taxable Income (From line 39, Form NJ-1040)                         4.                      4. 
                                                                                                     114,000 
    Enter in box 5a the amount from Worksheet H,         5a.                 
    line 1. (Instructions page 30)                                  
 5. 
    Property Tax Deduction. Enter the amount from 
    Worksheet H, line 2. (Instructions page 30) 
                                                                         5.                      5.  - 0 - 
 6.  New Jersey Taxable Income (Subtract line 5 from line 4)             6.                      6. 
                                                                                                     114,000 
 7.  Tax on line 6 amount (From Tax Table or Tax Rate Schedules)         7.                      7. 
                                                                                                     5,136 
 8.  Allowable Credit (Multiply line 7 by line 3)                        8.                      8. 
                                                                                                     4,689 
                                                                             
 9.  Credit for Taxes Paid to Other Jurisdiction. Enter  9a.       4,900 
    in box 9a the income or wage tax paid to other  
                                                                   
    jurisdiction. (Instructions page 34)  
     
    Credit Allowed. Enter the lesser of line 8 or  
    box 9a. This amount cannot exceed your New 
    Jersey tax on line 43.                                               9.                      9.  4,689 
                                                              
                                                                                                      GIT-3W 
                                                                                                     January  2024 
                                                                                                               18 
                                                                                          

                 Credit for Income Taxes Paid to Other Jurisdictions  
                                           (Wage Income) 
                               Understanding Income Tax 

  Example  #3  –  Determining  the  credit  when  the  amount  of  tax  paid  to  the  other 
                 jurisdiction is less than the proportional credit limitation (PCL) amount. 
  A resident taxpayer lives in New Jersey but works primarily in another state. Their only income for the year 
  consisted of $115,000 in wages, $105,000 of which was earned in, and taxed by, the other state. Their tax 
  liability to the other state, $4,631, is less than the PCL amount from line 8, Schedule NJ-COJ. The credit for 
  taxes paid to another jurisdiction is the lesser of the actual tax paid to the other jurisdiction or the  PCL 
  amount. Their credit will be $4,631, the actual amount of tax paid to the other state on the income being 
  taxed both by that state and New Jersey. 

                                                          Income Subject to Tax   
                                                                                  
                                            _New Jersey_  _Other Jurisdiction_   _Both_ 
 Wages                                      115,000       105,000                105,000 
 Income Subject to Tax Before               115,000       105,000                105,000 
 Exemptions and Deductions 
                                                                                 
 Less Exemptions                               (1,000) 
 Taxable Income                             114,000                              
 (From Line 39, Form NJ-1040) 

 Tax                                        5,136          4,631                 

 Line 1, Schedule NJ-COJ                                                         105,000 
 
                                                                                  GIT-3W 
                                                                                 January  2024 
                                                                                         19 
                                                           

                  Credit for Income Taxes Paid to Other Jurisdictions  
                                                   (Wage Income) 
                                          Understanding Income Tax 

 Example #3 – continued 

 They are not eligible for a property tax deduction/credit, so they complete only column B of Schedule NJ-
 COJ as follows: 

 Schedule NJ-COJ                          Credit for Income or Wage Taxes Paid                                 
                                          to Other Jurisdiction 

    Income properly taxed by both New Jersey and other jurisdiction. (Instructions page 32) 
    Jurisdiction Name: ______________________State_ X___________________________________________ 
 1. 
    Do not combine the same income taxed by more than one jurisdiction. 
    (The amount on line 1 cannot exceed the amount on line 2.)                                   1. 
                                                                                                     105,000 
 2. Income subject to tax by New Jersey (From line 29, NJ-1040)                                  2. 
                                                                                                     115,000 
 3. Maximum allowable credit percentage. Divide line 1 by line 2. (Instructions page 33)         3. 
                                                                                                     91.3043% 
 See page 25 to determine if you are eligible for a property tax  
                                                                               Column A              Column B 
 benefit. If you are not eligible, only complete column B. 

 4.  Taxable Income (From line 39, Form NJ-1040)                         4.                      4. 
                                                                                                     114,000 
    Enter in box 5a the amount from Worksheet H,         5a.                 
    line 1. (Instructions page 30)                                  
 5. 
    Property Tax Deduction. Enter the amount from 
    Worksheet H, line 2. (Instructions page 30) 
                                                                         5.                      5.  - 0 - 
 6.  New Jersey Taxable Income (Subtract line 5 from line 4)             6.                      6. 
                                                                                                     114,000 
 7.  Tax on line 6 amount (From Tax Table or Tax Rate Schedules)         7.                      7. 
                                                                                                     5,136 
 8.  Allowable Credit (Multiply line 7 by line 3)                        8.                      8. 
                                                                                                     4,689 
                                                                             
 9.  Credit for Taxes Paid to Other Jurisdiction. Enter  9a.       4,631 
    in box 9a the income or wage tax paid to other  
                                                                   
    jurisdiction. (Instructions page 34)  
     
    Credit Allowed. Enter the lesser of line 8 or  
    box 9a. This amount cannot exceed your New 
    Jersey tax on line 43.                                               9.                      9.  4,631 
                            
                                                                                                      GIT-3W 
                                                                                                     January  2024 
                                                                                                               20 
                                                                                          

                 Credit for Income Taxes Paid to Other Jurisdictions  
                                         (Wage Income) 
                               Understanding Income Tax 

 Example #4 – Determining the credit for income taxed both by another state and by a 
                 city  within  that  state  when  the  state  and  city  are  taxing  the  same 
                 amount of income. 
 A married couple files jointly, and are full-year New Jersey residents. One individual earned $15,000 in New 
 Jersey, and the other earned $30,000 in a city located in another state. The income actually taxed on the 
 nonresident return for the other state was $30,000, and the tax paid to the state on that income was $1,600. 
 The nonresident income actually taxed by the city was $30,000, and they paid $135 in city tax. 

 Income only can be reported once on line 1, Schedule NJ-COJ. Even though the one individual paid tax to 
 two jurisdictions, they complete only one Schedule NJ-COJ to calculate their credit. The total tax paid to both 
 the state and the city, $1,735, is compared to line 8, Schedule NJ-COJ to determine the credit. 

 They are eligible for either a property tax deduction or credit. They must first complete lines 1 and 2 of 
 Worksheet H to determine their property tax deduction amount. Then they will complete both columns A 
 and B of Schedule NJ-COJ in addition to Worksheet I. 

                                                          Income Subject to Tax                   
                                                                                                  
                                          __New Jersey__  ___Other State___      _Other City_ 
 Wages                                    45,000          30,000                                 30,000 
 Income Subject to Tax Before Exemptions  45,000          30,000                                 30,000 
 and Deductions 
                                                                                 
 Less Exemptions                            (2,000) 
 Taxable Income                           43,000                                 
 (From Line 39, Form NJ-1040) 

 Tax                                      683             1,600                                      135 
 Line 1, Schedule NJ-COJ                                                                         30,000 
 
                                                                                                  GIT-3W 
                                                                                                 January  2024 
                                                                                                         21 
                                                           

                    Credit for Income Taxes Paid to Other Jurisdictions  
                                                    (Wage Income) 
                                          Understanding Income Tax 

  Example #4 – continued 

  They paid $1,950 in property taxes on their home in New Jersey. They will enter $1,950 on line 40a, Form NJ-
  1040, and also on line 1 of Worksheet H. They will complete only lines 1 and 2. They will then complete 
  Schedule NJ-COJ and Worksheet I. 

                                         Worksheet H - Property Tax Deduction/Credit 
      Review the eligibility requirements on page 25 before completing Worksheet H. Part-year residents, see page 30. 

  Complete both columns of this worksheet to find out whether the deduction or the credit is better for you. 

  1. Property Taxes. Enter the property taxes from line 40a, Form NJ-1040. 
     Senior Freeze (Property Tax Reimbursement) applicants must use their base year amount.                                                                                            1.       1,950   
     (See instructions on page 30.) 
  2. Property Tax Deduction. Is the amount on line 1 of this worksheet $15,000 or more ($7,500 or more 
     if you and your spouse file separate returns but maintained the same main home)?  
        Yes. Enter $15,000 ($7,500 if you and your spouse file separate returns but maintained the 
                    same main home). 
        No. Enter the amount from line 1.                                                                                                                                              2.       1,950 ___  

  STOP — if you are claiming a credit for taxes paid to other jurisdictions. 
      Complete only lines 1 and 2. Then complete Schedule NJ-COJ and Worksheet I.  
      (See instructions on page 31.)  
                                                                                                                                         Column A                                  Column B            
  3. Taxable Income (From line 39 of Form NJ-1040) ................................................................................      3.                                        3.                       
  4. Property Tax Deduction (From line 2 above) .......................................................................................  4.                                        4.  - 0 -                
  5. New Jersey Taxable Income (Subtract line 4 from line 3) ................................................................            5.                                        5.                       
  6. Tax on line 5 amount (From Tax Table or Tax Rate Schedules)......................................................                   6.                                        6.                       
  7. Subtract line 6, column A from line 6, column B.............................................................................................................................  7.                       
  8. Is the line 7 amount $50 or more ($25 if you and your spouse file separate returns but maintained the same main home)? Part-year 
     residents, see page 30 before answering “No.”  
        Yes. The Property Tax Deduction is more beneficial for you. Make the following entries on your return. 
                            Form NJ-1040            Enter amount from:        
                            Line 41                 Line 4, column A          
                            Line 42                 Line 5, column A          
                            Line 43                 Line 6, column A          
                            Line 56               Make no entry               
        No. The Property Tax Credit is more beneficial for you. Make the following entries on your return. 
                            Form NJ-1040                Enter amount from:    
                            Line 41               Make no entry                                                                                    
                            Line 42                 Line 5, column B                                                                               
                            Line 43                 Line 6, column B                                                                               
                            Line 56       $50 ($25 if you and your spouse file separate returns but maintained the same main home). 
                                          Part-year residents must prorate this amount. (See instructions on page 30.) 

                                                                                                                                                                                             GIT-3W 
                                                                                                                                                                                            January  2024 
                                                                                                                                                                                                            22 
                                                                                                                                             

                  Credit for Income Taxes Paid to Other Jurisdictions  
                                                        (Wage Income) 
                                          Understanding Income Tax 

Example #4 – continued 

 They will complete Schedule NJ-COJ and Worksheet I as follows to determine the amount of their credit for 
 taxes paid to the other jurisdictions and whether they would receive a greater benefit from the property tax 
 deduction or the property tax credit. 

 Schedule NJ-COJ                                   Credit for Income or Wage Taxes Paid to                         
                                                   Other Jurisdiction 

    Income properly taxed by both New Jersey and other jurisdiction. (Instructions page 32) 
    Jurisdiction Name: ______________________State X and City Y____________________________ 
 1. 
    Do not combine the same income taxed by more than one jurisdiction. 
    (The amount on line 1 cannot exceed the amount on line 2.)                                       1. 
                                                                                                         30,000 
 2. Income subject to tax by New Jersey (From line 29, NJ-1040)                                      2. 
                                                                                                         45,000 
 3. Maximum allowable credit percentage. Divide line 1 by line 2. (Instructions page 33)             3. 
                                                                                                         66.6667% 
 See page 25 to determine if you are eligible for a property tax  
                                                                                            Column A     Column B 
 benefit. If you are not eligible, only complete column B. 

 4. Taxable Income (From line 39, Form NJ-1040)                              4.                      4. 
                                                                                            43,000       43,000 
    Enter in box 5a the amount from Worksheet H,                  5a.  1,950 
    line 1. (Instructions page 30)                                      
 5. 
    Property Tax Deduction. Enter the amount from 
    Worksheet H, line 2. (Instructions page 30) 
                                                                             5.             1,950    5.  - 0 - 
 6. New Jersey Taxable Income (Subtract line 5 from line 4)                  6.                      6. 
                                                                                            41,050       43,000 
 7. Tax on line 6 amount (From Tax Table or Tax Rate Schedules)              7.                      7. 
                                                                                             649         683 
 8. Allowable Credit (Multiply line 7 by line 3)                             8.                      8. 
                                                                                             433         455 
 9. Credit for Taxes Paid to Other Jurisdiction. Enter            9a.  1,735 
    in box 9a the income or wage tax paid to other  
    jurisdiction. (Instructions page 34)                               
     
    Credit Allowed. Enter the lesser of line 8 or  
    box 9a. This amount cannot exceed your New  
    Jersey tax on line 43.                                                   9.              433     9.  455 
                                    
                                                                                                          GIT-3W 
                                                                                                         January  2024 
                                                                                                                   23 
                                                                                              

                             Credit for Income Taxes Paid to Other Jurisdictions  
                                                            (Wage Income) 
                                                    Understanding Income Tax 

    Example #4 – continued 

    They receive a greater benefit from the property tax credit. They enter the amounts from lines 6 and 7, column 
    B, Schedule NJ-COJ on lines 42 and 43, Form NJ-1040, as indicated in the instructions on Worksheet I. Their 
    credit for taxes paid to the other jurisdictions is $455, the amount on line 2, column B, Worksheet I. Their 
    property tax credit on line 56, Form NJ-1040, is $50. 

                                                               Worksheet I 
                                                 Which Property Tax Benefit to Use 
                                                                                                                                                         COLUMN A     COLUMN B 
 1. Tax. Enter amounts from line 7, Schedule NJ-COJ, columns  
    A and B here ...................................................................................................................................  
                                                                                                                                                      1. 649       1. 683       
 2. Credit for Taxes Paid to Other Jurisdiction. Enter amounts from line 9, 
    Schedule NJ-COJ, columns A and B here. If you completed more than one 
    Schedule NJ-COJ, enter the total of all Line 9 amounts (columns A and B) in 
    the corresponding column .....................................................................................................  
                                                                                                                                                      2. 433       2. 455       
 3. Balance of Tax Due. Subtract line 2 from line 1 in each column ............................  
                                                                                                                                                      3. 216       3. 228       
 4. Subtract line 3, column A from line 3, column B ...........................................................                                        
                                                                                                                                                                   4. 12        
 5. Is the line 4 amount $50 or more ($25 if you and your spouse file separate returns but maintained the same main home)? 
    Part-year residents, see instructions for line 9, Schedule NJ-COJ before answering “No.” 
             Yes. The Property Tax Deduction is more beneficial for you. Make the following entries on your return. 
                          Form NJ-1040              Enter amount from: 
                             Line 41                Line 5, Column A, Schedule NJ-COJ 
                             Line 42                Line 6, Column A, Schedule NJ-COJ 
                             Line 43                Line 7, Column A, Schedule NJ-COJ 
                             Line 44                Line 2, Column A, Worksheet I 
                             Line 56                Make no entry 
              No. The Property Tax Credit is more beneficial for you. Make the following entries on your return. 
                          Form NJ-1040              Enter amount from:    
                             Line 41                Make no entry 
                             Line 42                Line 6, Column B, Schedule NJ-COJ 
                             Line 43                Line 7, Column B, Schedule NJ-COJ 
                             Line 44                Line 2, Column B, Worksheet I 
                             Line 56                $50 ($25 if you and your spouse file separate returns but maintained the same main 
                                                    home). Part-year residents must prorate this amount. (See instructions for line 9, Schedule 
                                                    NJ-COJ) 
                                                            (Keep for your records) 
                                       
                                                                                                                                                                       GIT-3W 
                                                                                                                                                                      January  2024 
                                                                                                                                                                               24 
                                                                                                                                                          

                 Credit for Income Taxes Paid to Other Jurisdictions  
                                                (Wage Income) 
                               Understanding Income Tax 

  Example #5 – Determining the credit when income is taxed by two different states 
                 outside New Jersey. 
  A married couple file jointly and are full-year New Jersey residents. One individual earned wages of $52,000 
  in New York State. Their New York taxable income (from their nonresident return Form IT-203) was $50,500, 
  and they paid tax of $2,600 to New York. The other individual worked in Delaware, where they earned wages 
  of $38,000 and paid $930 in Delaware income tax. They are not eligible for a property tax deduction/credit. 

  Because they are claiming a credit for taxes paid to more than one jurisdiction, they must complete two 
  separate Schedules NJ-COJ: one for New York State and one for Delaware. They will only complete column B 
  of each schedule as if no other state were involved.  

  To determine the total credit for taxes paid to other jurisdictions for line 44, Form NJ-1040, they add the 
  amounts from line 9, column B of each Schedule NJ-COJ. 

                                                                 Income Subject to Tax   
                                                                                         
                                                 __New Jersey__  ___New York___         _Delaware_ 
 Wages                                           90,000          52,000                 38,000 
 Interest                                        1,000                                   
 Dividends                                       2,000                                   
 New York Adjustments                                            (1,500)                 
 Income Subject to Tax Before Exemptions         93,000          50,500                 38,000 
 and Deductions 
                                                                                        
 Less Exemptions                                   (2,000) 
 Taxable Income                                  91,000                                 
 (From Line 39, Form NJ-1040) 

 Tax                                             2,254           2,600                  930 
 Line 1, Schedule NJ-COJ                                         50,500                 38,000 

  (a)  Schedule NJ-COJ income taxed by New York 
  (b)  Schedule NJ-COJ income taxed by Delaware 

                                                                                         GIT-3W 
                                                                                        January  2024 
                                                                                                   25 
                                                                  

                   Credit for Income Taxes Paid to Other Jurisdictions  
                                                    (Wage Income) 
                                           Understanding Income Tax 

 Example #5 – continued 

 (a) Credit for taxes paid to New York on income taxed by that state. 

 Schedule NJ-COJ                           Credit for Income or Wage Taxes Paid                            
                                           to Other Jurisdiction 

     Income properly taxed by both New Jersey and other jurisdiction. (Instructions page 32) 
     Jurisdiction Name: ______________________New York State________________________________ 
 1. 
     Do not combine the same income taxed by more than one jurisdiction. 
     (The amount on line 1 cannot exceed the amount on line 2.)                              1. 
                                                                                                 50,500 
 2.  Income subject to tax by New Jersey (From line 29, NJ-1040)                             2. 
                                                                                                 93,000 
 3.  Maximum allowable credit percentage. Divide line 1 by line 2. (Instructions page 33)    3. 
                                                                                                 54.3011% 
 See page 25 to determine if you are eligible for a property tax  
                                                                                Column A         Column B 
 benefit. If you are not eligible, only complete column B. 

 4.  Taxable Income (From line 39, Form NJ-1040)                         4.                  4. 
                                                                                                 91,000 
     Enter in box 5a the amount from Worksheet H,        5a.         
     line 1. (Instructions page 30)                                 
 5. 
     Property Tax Deduction. Enter the amount from 
     Worksheet H, line 2. (Instructions page 30) 
                                                                         5.                  5.  - 0 - 
 6.  New Jersey Taxable Income (Subtract line 5 from line 4)             6.                  6. 
                                                                                                 91,000 
 7.  Tax on line 6 amount (From Tax Table or Tax Rate Schedules)         7.                  7. 
                                                                                                 2,254 
 8.  Allowable Credit (Multiply line 7 by line 3)                        8.                  8. 
                                                                                                 1,223 
 9.  Credit for Taxes Paid to Other Jurisdiction. Enter  9a.       2,600 
     in box 9a the income or wage tax paid to other  
                                                                   
     jurisdiction. (Instructions page 34)  
      
     Credit Allowed. Enter the lesser of line 8 or  
     box 9a. This amount cannot exceed your New 
     Jersey tax on line 43.                                              9.                  9.  1,223 
                                                              
                                                                                                  GIT-3W 
                                                                                                 January  2024 
                                                                                                           26 
                                                                                           

                   Credit for Income Taxes Paid to Other Jurisdictions  
                                                    (Wage Income) 
                                           Understanding Income Tax 

 Example #5 – continued 

 (b) Credit for taxes paid to Delaware on income taxed by that state. 
 Schedule NJ-COJ                           Credit for Income or Wage Taxes Paid                              
                                           to Other Jurisdiction 

     Income properly taxed by both New Jersey and other jurisdiction. (Instructions page 32) 
     Jurisdiction Name: ______________________Delaware________________________________________ 
 1. 
     Do not combine the same income taxed by more than one jurisdiction. 
     (The amount on line 1 cannot exceed the amount on line 2.)                                1. 
                                                                                                   38,000 
 2.  Income subject to tax by New Jersey (From line 29, NJ-1040)                               2. 
                                                                                                   93,000 
 3.  Maximum allowable credit percentage. Divide line 1 by line 2. (Instructions page 33)      3. 
                                                                                                   40.8602% 
 See page 25 to determine if you are eligible for a property tax  
                                                                                Column A           Column B 
 benefit. If you are not eligible, only complete column B. 

 4.  Taxable Income (From line 39, Form NJ-1040)                        4.                     4. 
                                                                                                   91,000 
     Enter in box 5a the amount from Worksheet H,        5a.         
     line 1. (Instructions page 30)                                 
 5. 
     Property Tax Deduction. Enter the amount from 
     Worksheet H, line 2. (Instructions page 30) 
                                                                        5.                     5.  - 0 - 
 6.  New Jersey Taxable Income (Subtract line 5 from line 4)            6.                     6. 
                                                                                                   91,000 
 7.  Tax on line 6 amount (From Tax Table or Tax Rate Schedules)        7.                     7. 
                                                                                                   2,254 
 8.  Allowable Credit (Multiply line 7 by line 3)                       8.                     8. 
                                                                                                   920 
 9.  Credit for Taxes Paid to Other Jurisdiction. Enter  9a.        930 
     in box 9a the income or wage tax paid to other  
                                                                   
     jurisdiction. (Instructions page 34)  
      
     Credit Allowed. Enter the lesser of line 8 or  
     box 9a. This amount cannot exceed your New 
     Jersey tax on line 43.                                             9.                     9.  920 

They report a total credit for income taxes paid to both jurisdictions on line 44, Form NJ-1040, of $2,143 ($1,223 
+ $920 from line 9 of the first and second Schedule NJ-COJ). 

                                                                                                    GIT-3W 
                                                                                                   January  2024 
                                                                                                             27 
                                                                                           

                 Credit for Income Taxes Paid to Other Jurisdictions  
                                         (Wage Income) 
                               Understanding Income Tax 

  Example #6 – Determining line 1, Schedule NJ-COJ when the other jurisdiction uses 
                 income from all sources to determine the tax due. 
  Two individuals are married and New Jersey residents. One works in New York, and their salary is $65,000. 
  The other works in New Jersey, and their salary is $35,000. They also have income from interest, dividends, 
  and capital gains. Although only the first individual’s salary is subject to tax by New York, they must determine 
  their New York tax liability as if they were New York residents. First, they must calculate the tax on their total 
  income from all sources (federal amount). Then, they must multiply the resulting “base tax” by the proportion 
  that their total New York source income (the New York salary) bears to their total income from all sources.  

  Determining the tax liability of a nonresident in this manner may result in an increase in the average tax rate 
  for income derived from the other jurisdiction. However, it does not affect the amount of income actually 
  being taxed by the other jurisdiction. 

                                                          Income Subject to Tax   
                                                                                  
                                          __New Jersey__  _Federal Amount_       _New York_ 
 Wages                                     100,000         100,000               65,000 
 Interest                                 100             100                    0 
 Dividends                                50              50                     0 
 Gains                                    340             340                    0 
 Income Subject to Tax Before Exemptions  100,490         100,490                65,000 
 and Deductions 
                                                                                 
 Less Exemptions                            (2,000) 
 Taxable Income                           98,490                                 
 (From Line 39, Form NJ-1040) 

 Tax                                      2,666                                  3,900 
 Line 1, Schedule NJ-COJ                                                         65,000 
                                                                                 
                                                                                  GIT-3W 
                                                                                 January  2024 
                                                                                            28 
                                                           

                  Credit for Income Taxes Paid to Other Jurisdictions  
                                                   (Wage Income) 
                                          Understanding Income Tax 

 Example #6 – continued 

 They are not eligible for a property tax deduction/credit, so they complete Schedule NJ-COJ, Form NJ-1040 
 as shown below to determine the amount of their credit for taxes paid to New York. 

 Schedule NJ-COJ                          Credit for Income or Wage Taxes Paid                            
                                          to Other Jurisdiction 

    Income properly taxed by both New Jersey and other jurisdiction. (Instructions page 32) 
    Jurisdiction Name: ______________________New York State________________________________ 
 1. 
    Do not combine the same income taxed by more than one jurisdiction. 
    (The amount on line 1 cannot exceed the amount on line 2.)                              1. 
                                                                                                65,000 
 2. Income subject to tax by New Jersey (From line 29, NJ-1040)                             2. 
                                                                                                100,490 
 3. Maximum allowable credit percentage. Divide line 1 by line 2. (Instructions page 33)    3. 
                                                                                                64.6831% 
 See page 25 to determine if you are eligible for a property tax  
                                                                               Column A         Column B 
 benefit. If you are not eligible, only complete column B. 

 4.  Taxable Income (From line 39, Form NJ-1040)                         4.                 4. 
                                                                                                98,490 
    Enter in box 5a the amount from Worksheet H,         5a.         
    line 1. (Instructions page 30)                                  
 5. 
    Property Tax Deduction. Enter the amount from 
    Worksheet H, line 2. (Instructions page 30) 
                                                                         5.                 5.  - 0 - 
 6.  New Jersey Taxable Income (Subtract line 5 from line 4)             6.                 6. 
                                                                                                98,490 
 7.  Tax on line 6 amount (From Tax Table or Tax Rate Schedules)         7.                 7. 
                                                                                                2,666 
 8.  Allowable Credit (Multiply line 7 by line 3)                        8.                 8. 
                                                                                                1,724 
 9.  Credit for Taxes Paid to Other Jurisdiction. Enter  9a.       3,900 
    in box 9a the income or wage tax paid to other  
                                                                   
    jurisdiction. (Instructions page 34)  
     
    Credit Allowed. Enter the lesser of line 8 or  
    box 9a. This amount cannot exceed your New 
    Jersey tax on line 43.                                               9.                 9.  1,724 

                                                                                                 GIT-3W 
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                                                                                                          29 
                                                                                          

                 Credit for Income Taxes Paid to Other Jurisdictions  
                               (Wage Income) 
                               Understanding Income Tax 

  Example #7 – Determining the line 1, Schedule NJ-COJ when you allocate income in 
                 the other jurisdiction. 
  A resident taxpayer who works in another state is required to work one day each week in New Jersey. Their 
  total wages for the year were $125,000. Their W-2 showed all the income was earned in the other state; it did 
  not reflect the days worked in New Jersey. They must allocate their total wages between the other jurisdiction 
  and New Jersey based on the percentage of time worked in each locality. Line 1, Schedule NJ-COJ is limited 
  to income actually taxed by both jurisdictions: $100,000. 

                                                             Income Subject to Tax   
                                                                                     
                                __New Jersey__               _Other Jurisdiction_   __Both__ 
 Wages                                    125,000             100,000               100,000 
 Income Subject to Tax Before             125,000             100,000               100,000 
 Exemptions and Deductions 
                                                                                    
 Less Exemptions                           (1,000) 
 Taxable Income                          124,000                                    
 (From Line 39, Form NJ-1040) 

 Tax                                     5,773               4,800                   
 Line 1, Schedule NJ-COJ                                                            100,000 
                                                                                    
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                                                                                    January  2024 
                                                                                             30 
                                                              

                  Credit for Income Taxes Paid to Other Jurisdictions  
                                                   (Wage Income) 
                                          Understanding Income Tax 

 Example #7 – continued 

 They are not eligible for a property tax deduction/credit, so they complete Schedule NJ-COJ, Form NJ-1040, 
 as shown below. 

 Schedule NJ-COJ                          Credit for Income or Wage Taxes Paid                              
                                          to Other Jurisdiction 

    Income properly taxed by both New Jersey and other jurisdiction. (Instructions page 32) 
    Jurisdiction Name: ______________________State X_________________________________________ 
 1. 
    Do not combine the same income taxed by more than one jurisdiction. 
    (The amount on line 1 cannot exceed the amount on line 2.)                                1. 
                                                                                                  100,000 
 2. Income subject to tax by New Jersey (From line 29, NJ-1040)                               2. 
                                                                                                  125,000 
 3. Maximum allowable credit percentage. Divide line 1 by line 2. (Instructions page 33)      3. 
                                                                                                  80.0000% 
 See page 25 to determine if you are eligible for a property tax  
                                                                               Column A           Column B 
 benefit. If you are not eligible, only complete column B. 

 4.  Taxable Income (From line 39, Form NJ-1040)                         4.                   4. 
                                                                                                  124,000 
    Enter in box 5a the amount from Worksheet H,         5a.         
    line 1. (Instructions page 30)                                  
 5. 
    Property Tax Deduction. Enter the amount from 
    Worksheet H, line 2. (Instructions page 30) 
                                                                         5.                   5.  - 0 - 
 6.  New Jersey Taxable Income (Subtract line 5 from line 4)             6.                   6. 
                                                                                                  124,000 
 7.  Tax on line 6 amount (From Tax Table or Tax Rate Schedules)         7.                   7. 
                                                                                                  5,773 
 8.  Allowable Credit (Multiply line 7 by line 3)                        8.                   8. 
                                                                                                  4,618 
 9.  Credit for Taxes Paid to Other Jurisdiction. Enter  9a.       4,800 
    in box 9a the income or wage tax paid to other  
                                                                   
    jurisdiction. (Instructions page 34)  
     
    Credit Allowed. Enter the lesser of line 8 or  
    box 9a. This amount cannot exceed your New 
    Jersey tax on line 43.                                               9.                   9.  4,618 
                            
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                 Credit for Income Taxes Paid to Other Jurisdictions  
                                (Wage Income) 
                                Understanding Income Tax 

  Example #8 – Determining line 1, Schedule NJ-COJ when the other jurisdiction allows 
                 an adjustment to (reduce) income that is not allowed by New Jersey. 
  A New Jersey resident taxpayer, works in New York where they earned wages of $115,000. They paid alimony 
  of $20,000. In New York, the alimony payment is an adjustment to income that reduces line 1, Schedule NJ-
  COJ, whereas in New Jersey, the alimony is a deduction and does not reduce line 2, Schedule NJ-COJ. (Line 
  2, Schedule NJ-COJ includes New Jersey income from all sources after subtracting any applicable pension 
  and/or  other  retirement  income  exclusion  allowed  by  New  Jersey,  but  before  subtracting  any  personal 
  exemptions or deductions such as alimony payments.)  

  The schedule below shows how to determine the amount of income subject to tax in both jurisdictions when 
  there is an adjustment to income allowed by the other jurisdiction. 

                                  Income Subject to Tax                            
                                                                                   
                                 __New Jersey__                       _New York_   
 Wages                            115,000                              115,000     
 New York Adjustments (Alimony)                                       (20,000)     
 Income Subject to Tax Before     115,000                              95,000      
 Exemptions and Deductions 
                                                                                  
 Less Exemptions                 (1,000) 
 Deductions (Alimony)            _(20,000)_ 
 Taxable Income                  94,000                                           
 (From Line 39, Form NJ-1040) 
 Tax                             3,863                                3,736        
 Line 1, Schedule NJ-COJ                                              95,000      
                                                                                  
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                  Credit for Income Taxes Paid to Other Jurisdictions  
                                                   (Wage Income) 
                                          Understanding Income Tax 

 Example #8 – continued 

 They are not eligible for a property tax deduction/credit. Their Schedule NJ-COJ will look like this: 

 Schedule NJ-COJ                          Credit for Income or Wage Taxes Paid                            
                                          to Other Jurisdiction 

    Income properly taxed by both New Jersey and other jurisdiction. (Instructions page 32) 
    Jurisdiction Name: ______________________New York State________________________________ 
 1. 
    Do not combine the same income taxed by more than one jurisdiction. 
    (The amount on line 1 cannot exceed the amount on line 2.)                              1. 
                                                                                                95,000 
 2. Income subject to tax by New Jersey (From line 29, NJ-1040)                             2. 
                                                                                                115,000 
 3. Maximum allowable credit percentage. Divide line 1 by line 2. (Instructions page 33)    3. 
                                                                                                82.6087% 
 See page 25 to determine if you are eligible for a property tax  
                                                                               Column A         Column B 
 benefit. If you are not eligible, only complete column B. 

 4.  Taxable Income (From line 39, Form NJ-1040)                         4.                 4. 
                                                                                                94,000 
    Enter in box 5a the amount from Worksheet H,         5a.         
    line 1. (Instructions page 30)                                  
 5. 
    Property Tax Deduction. Enter the amount from 
    Worksheet H, line 2. (Instructions page 30) 
                                                                         5.                 5.  - 0 - 
 6.  New Jersey Taxable Income (Subtract line 5 from line 4)             6.                 6. 
                                                                                                94,000 
 7.  Tax on line 6 amount (From Tax Table or Tax Rate Schedules)         7.                 7. 
                                                                                                3,863 
 8.  Allowable Credit (Multiply line 7 by line 3)                        8.                 8. 
                                                                                                3,191 
 9.  Credit for Taxes Paid to Other Jurisdiction. Enter  9a.       3,736 
    in box 9a the income or wage tax paid to other  
                                                                   
    jurisdiction. (Instructions page 34)  
     
    Credit Allowed. Enter the lesser of line 8 or  
    box 9a. This amount cannot exceed your New 
    Jersey tax on line 43.                                               9.                 9.  3,191 
                            
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                 Credit for Income Taxes Paid to Other Jurisdictions  
                                                        (Wage Income) 
                              Understanding Income Tax 

 Example #9 – Determining the credit for income taxed both by another state and by a 
                city within that state when the city taxes more income than the state. 
 A married, full-year resident couple files jointly. One earned wages of $15,000 in New Jersey. The other 
 worked in a city located in another state, where they earned wages of $30,000. The other state taxed $20,000 
 of their income, and they paid tax of $1,600 to that state. The city taxed $30,000 of their income, and they 
 paid $135 in city tax.  

 They must complete two separate Schedule NJ-COJs: one for the amount of income that was taxed by both 
 the other state and city, and one for the amount of income taxed only by the city (excess income). The total 
 credit allowed is the sum of the two separate Schedule NJ-COJ calculations. 

 They are not eligible for a property tax deduction or credit and complete only column B of each Schedule 
 NJ-COJ. 

                                                                            Income Subject to Tax   
                                                                                                    
                                                              _New Jersey_  _Other State_         _Other City_ 
 Wages                                                        45,000        20,000                 30,000 
 Income Subject to Tax Before                                 45,000        20,000                 30,000 
 Exemptions and Deductions 
                                                                                                   
 Less Exemptions                                                (2,000) 
 Taxable Income                                               43,000                               
 (From Line 39, Form NJ-1040) 

 Tax                                                           683          1,600                  135 
 Line 1, Schedule NJ-COJ                                                    20,000                 10,000 
                                                               
 (a)  Schedule NJ-COJ for income taxed by both jurisdictions 
 (b)  Schedule NJ-COJ for income taxed only by the city 
                                                               
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                  Credit for Income Taxes Paid to Other Jurisdictions  
                                                        (Wage Income) 
                                          Understanding Income Tax 

 Example #9 – continued 

 (a) Credit for taxes paid on the amount of income taxed by both the state and city. 

 They enter $20,000 on line 1 of the first Schedule NJ-COJ. This is the amount of income taxed by both 
 jurisdictions. The entry on line 9 is the lesser of the amount on line 8 (the proportional credit limitation 
 amount for $20,000) or the amount from box 9a (the total tax actually paid to both the state and the city on 
 $20,000).  

 The tax actually paid to both the state and the city on $20,000 is $1,690 ($1,600 paid to the state + $90 paid 
 to the city). They calculate the tax paid to the city on $20,000 as follows: $135 × ($20,000 ÷ $30,000) = $90. 

 Schedule NJ-COJ                                   Credit for Income or Wage Taxes Paid to                                 
                                                   Other Jurisdiction 
    Income properly taxed by both New Jersey and other jurisdiction. (Instructions page 32) 
 1. Jurisdiction Name: ______________________State X and City Y_____________________________________________ 
    Do not combine the same income taxed by more than one jurisdiction.                                      1. 
    (The amount on line 1 cannot exceed the amount on line 2.)                                                   20,000 
 2. Income subject to tax by New Jersey (From line 29, NJ-1040)                                              2. 
                                                                                                                 45,000 
 3. Maximum allowable credit percentage. Divide line 1 by line 2. (Instructions page 33)                     3. 
                                                                                                                 44.4444% 
 See page 25 to determine if you are eligible for a property tax  
                                                                                            Column A             Column B 
 benefit. If you are not eligible, only complete column B. 
 4. Taxable Income (From line 39, Form NJ-1040)                              4.                              4. 
                                                                                                                 43,000 
    Enter in box 5a the amount from Worksheet H,                  5a.                     
    line 1. (Instructions page 30) 
 5.                                                                     
    Property Tax Deduction. Enter the amount from 
    Worksheet H, line 2. (Instructions page 30)                              5.                              5.  - 0 - 
 6. New Jersey Taxable Income (Subtract line 5 from line 4)                  6.                              6. 
                                                                                                                 43,000 
 7. Tax on line 6 amount (From Tax Table or Tax Rate Schedules)              7.                              7. 
                                                                                                                 683 
 8. Allowable Credit (Multiply line 7 by line 3)                             8.                              8. 
                                                                                                                 304 
                                                                                          
 9. Credit for Taxes Paid to Other Jurisdiction. Enter            9a.  1,690 
    in box 9a the income or wage tax paid to other  
    jurisdiction. (Instructions page 34)                               
     
    Credit Allowed. Enter the lesser of line 8 or  
    box 9a. This amount cannot exceed your New  
    Jersey tax on line 43.                                                   9.                              9.  304 
                                    
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                                                                                                                           35 
                                                                                              

                  Credit for Income Taxes Paid to Other Jurisdictions  
                                                        (Wage Income) 
                                          Understanding Income Tax 

 Example #9 – continued 

 (b) Credit for taxes paid to the city on income taxed by the city but not by the state (excess income). 

 They enter $10,000 on line 1 of the second Schedule NJ-COJ. This is the excess income taxed only by the city. 
 The entry on line 9 is the lesser of the amount on line 8 (the proportional credit limitation amount for $10,000) 
 or the amount from box 9a (the tax actually paid to the city on $10,000).  

 They calculate the tax paid to the city on $10,000 as follows: $135 × ($10,000 ÷ $30,000) = $45. 
 Schedule NJ-COJ                                   Credit for Income or Wage Taxes Paid to                                     
                                                   Other Jurisdiction 
    Income properly taxed by both New Jersey and other jurisdiction. (Instructions page 32) 
 1. Jurisdiction Name: ______________________City Y_________________________________________________________ 
    Do not combine the same income taxed by more than one jurisdiction.                                      1. 
    (The amount on line 1 cannot exceed the amount on line 2.)                                                         10,000 
 2. Income subject to tax by New Jersey (From line 29, NJ-1040)                                              2. 
                                                                                                                       45,000 
 3. Maximum allowable credit percentage. Divide line 1 by line 2. (Instructions page 33)                     3. 
                                                                                                                    22.2222% 
 See page 25 to determine if you are eligible for a property tax  
                                                                                            Column A                Column B 
 benefit. If you are not eligible, only complete column B. 
 4. Taxable Income (From line 39, Form NJ-1040)                            4.                                4. 
                                                                                                                43,000 
    Enter in box 5a the amount from Worksheet H,                  5a.                     
    line 1. (Instructions page 30) 
 5.                                                                     
    Property Tax Deduction. Enter the amount from 
    Worksheet H, line 2. (Instructions page 30)                            5.                                5.        - 0 - 
 6. New Jersey Taxable Income (Subtract line 5 from line 4)                6.                                6. 
                                                                                                                43,000 
 7. Tax on line 6 amount (From Tax Table or Tax Rate Schedules)            7.                                7. 
                                                                                                                683 
 8. Allowable Credit (Multiply line 7 by line 3)                           8.                                8. 
                                                                                                                152 
                                                                                          
 9. Credit for Taxes Paid to Other Jurisdiction. Enter            9a.   45 
    in box 9a the income or wage tax paid to other  
    jurisdiction. (Instructions page 34)                               
     
    Credit Allowed. Enter the lesser of line 8 or  
    box 9a. This amount cannot exceed your New  
    Jersey tax on line 43.                                                 9.                                9. 45 

 The total credit for taxes paid to both jurisdictions for line 44, Form NJ-1040 is $349 ($304 + $45 from line 9 
 of the first and second Schedule NJ-COJ).                                                   

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                  Credit for Income Taxes Paid to Other Jurisdictions  
                               (Wage Income) 
                               Understanding Income Tax 

 Example #10 – Determining line 1, Schedule NJ-COJ when part of New Jersey income 
                  is taxed by the other jurisdiction. 
 A full-year resident taxpayer claims one dependent child besides themselves, and their filing status is head 
 of household. The amount of wages taxed by the other jurisdiction is $12,500, and the income tax paid to 
 the other jurisdiction is $400. They also reported $2,000 in interest, $3,000 in dividends, and $21,000 in capital 
 gains on their New Jersey return. Since the interest, dividends, and capital gains were not derived from a 
 business, trade, or profession carried on in the other jurisdiction, they do not report that income to the other 
 jurisdiction and do not       include that income on line 1, Schedule NJ-COJ. 

 The credit for taxes paid to the other jurisdiction can never exceed the proportion that the out-of-state 
 income bears to the total New Jersey taxable income multiplied by the New Jersey tax. In this example, only 
 32.4675% of their income was subject to the other jurisdiction’s tax. 

                                                       Income Subject to Tax            
                                                                                        
                               __New Jersey__          _Other Jurisdiction_            __Both__ 
 Wages                           12,500                                        12,500  12,500 
 Interest                       2,000                                                   
 Dividends                      3,000                                                   
 Capital Gains                    21,000                                                
 Income Subject to Tax Before     38,500                                       12,500  12,500 
 Exemptions and Deductions 
                                                                                       
 Less Exemptions                  (2,500) 
 Taxable Income                    36,000                                              
 (From Line 39, Form NJ-1040) 

 Tax                            560                                            400      
 Line 1, Schedule NJ-COJ                                                               12,500 
                                                                                       
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                                                                                       January  2024 
                                                                                                37 
                                                                                

                  Credit for Income Taxes Paid to Other Jurisdictions  
                                                   (Wage Income) 
                                          Understanding Income Tax 

 Example #10 – continued 

 They are not eligible for a property tax deduction/credit, so they complete Schedule NJ-COJ, Form NJ-1040, 
 as shown below. 

 Schedule NJ-COJ                          Credit for Income or Wage Taxes Paid                            
                                          to Other Jurisdiction 

    Income properly taxed by both New Jersey and other jurisdiction. (Instructions page 32) 
    Jurisdiction Name: ______________________Name of Jurisdiction__________________________ 
 1. 
    Do not combine the same income taxed by more than one jurisdiction. 
    (The amount on line 1 cannot exceed the amount on line 2.)                              1. 
                                                                                                12,500 
 2. Income subject to tax by New Jersey (From line 29, NJ-1040)                             2. 
                                                                                                38,500 
 3. Maximum allowable credit percentage. Divide line 1 by line 2. (Instructions page 33)    3. 
                                                                                                32.4675% 
 See page 25 to determine if you are eligible for a property tax  
                                                                               Column A         Column B 
 benefit. If you are not eligible, only complete column B. 

 4.  Taxable Income (From line 39, Form NJ-1040)                        4.                  4. 
                                                                                                36,000 
    Enter in box 5a the amount from Worksheet H,         5a.         
    line 1. (Instructions page 30)                                  
 5. 
    Property Tax Deduction. Enter the amount from 
    Worksheet H, line 2. (Instructions page 30) 
                                                                        5.                  5.  - 0 - 
 6.  New Jersey Taxable Income (Subtract line 5 from line 4)            6.                  6. 
                                                                                                36,000 
 7.  Tax on line 6 amount (From Tax Table or Tax Rate Schedules)        7.                  7. 
                                                                                                560 
 8.  Allowable Credit (Multiply line 7 by line 3)                       8.                  8. 
                                                                                                182 
 9.  Credit for Taxes Paid to Other Jurisdiction. Enter  9a.        400 
    in box 9a the income or wage tax paid to other  
                                                                   
    jurisdiction. (Instructions page 34)  
     
    Credit Allowed. Enter the lesser of line 8 or  
    box 9a. This amount cannot exceed your New 
    Jersey tax on line 43.                                              9.                  9.  182 
 
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 Credit for Income Taxes Paid to Other Jurisdictions  
  (Wage Income) 
  Understanding Income Tax 

 Example #11 – Determining the credit when a part-year resident moves to New Jersey 
 during the tax year and continues to work outside New Jersey. 
 A taxpayer lived in Maryland from January 1 through March 31, then moved to New Jersey on April 1. They 
 worked in Maryland for the entire year, where they earned wages of $100,000. The taxpayer must file two 
 returns with Maryland: a resident return for the period from January 1 through March 31, and a nonresident 
 return for the period April 1 to December 31. They also must file a part-year resident return in New Jersey 
 and report their income between April 1 and December 31. Since the income taxed by New Jersey both was 
 earned in, and taxed by, Maryland, they are eligible for a credit for taxes paid to another jurisdiction. 

                                                       GIT-3W 
                                                      January  2024 
                                                                                                           39 
                            

                  Credit for Income Taxes Paid to Other Jurisdictions  
                                              (Wage Income) 
                                              Understanding Income Tax 

                                                                Income Subject to Tax  
                                                                                      Maryland 
                                               New Jersey              Maryland       Nonresident 
                                              _Resident Return_  _Resident Return_    __Return__ 
 Wages                                         100,000                 100,000        100,000 
 Subtractions:                                                                         
 Income as a nonresident                       (25,000)                (75,000)        
 Income as a resident                                                                 (25,000) 
 Income Subject to Tax Before                  75,000                  25,000         75,000 
 Exemptions and Deductions 
                                                                                       
 Less Standard Deduction (Maryland only):                                              
 Resident       2,000 × (25,000 ÷ 100,000)                             (500)           
 Nonresident 2,000 × (75,000 ÷ 100,000)                                               (1,500) 
 Less Exemptions:                                                                      
 Maryland                                                                              
 Resident        2,100 × (25,000 ÷ 100,000)                            (525)           
 Nonresident  2,100 × (75,000 ÷ 100,000)                                              (1,575) 
 New Jersey       1,000 × (9 ÷ 12)             ___(750)                ________       ________ 

 Taxable Income                                74,250                  23,975         71,925 
 (For New Jersey, From Line 39, Form NJ-1040) 

 State Tax                                     2,611                   1,107          3,433 

 Local Tax (Baltimore County – 3.2%)           ______ __0              ____767  _     ______ _0  

 Total State Tax and Local Tax                 2,611                   1,874          3,433 
 Line 1, Schedule NJ-COJ                                                              75,000 
                          
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                                                                                      January  2024 
                                                                                                  40 
                                                                        

                     Credit for Income Taxes Paid to Other Jurisdictions  
                                                    (Wage Income) 
                                          Understanding Income Tax 

  Example #11 –       continued 
  The taxpayer paid $3,600 in property taxes during the nine months they lived in New Jersey. They will enter 
  $3,600 on line 40a, Form NJ-1040, and also on line 1 of Worksheet H. They only complete lines 1 and 2. Then 
  they complete Schedule NJ-COJ and Worksheet I. 

                                         Worksheet H - Property Tax Deduction/Credit 
      Review the eligibility requirements on page 25 before completing Worksheet H. Part-year residents, see page 30. 

  Complete both columns of this worksheet to find out whether the deduction or the credit is better for you. 

  1.  Property Taxes. Enter the property taxes from line 40a, Form NJ-1040. 
      Senior Freeze (Property Tax Reimbursement) applicants must use their base year amount.                                                                                           1.        3,600  
      (See instructions on page 30.) 
  2. Property Tax Deduction. Is the amount on line 1 of this worksheet $15,000 or more ($7,500 or more 
     if you and your spouse file separate returns but maintained the same main home)?  
        Yes. Enter $15,000 ($7,500 if you and your spouse file separate returns but maintained the 
               same main home). 
        No. Enter the amount from line 1.                                                                                                                                              2.        3,600 ___  

  STOP — if you are claiming a credit for taxes paid to other jurisdictions. 
      Complete only lines 1 and 2. Then complete Schedule NJ-COJ and Worksheet I.  
      (See instructions on page 31.)  
                                                                                                                                         Column A                                  Column B   
  3. Taxable Income (From line 39 of Form NJ-1040)................................................................................       3.                                        3.                        
  4. Property Tax Deduction (From line 2 above) .......................................................................................  4.                                        4.  - 0 -                 
  5. New Jersey Taxable Income (Subtract line 4 from line 3) ................................................................            5.                                        5.                        
  6. Tax on line 5 amount (From Tax Table or Tax Rate Schedules) .....................................................                   6.                                        6.                        
  7. Subtract line 6, column A from line 6, column B ............................................................................................................................  7.                        
  8. Is the line 7 amount $50 or more ($25 if you and your spouse file separate returns but maintained the same main home)? Part-year 
     residents, see page 30 before answering “No.”  
        Yes. The Property Tax Deduction is more beneficial for you. Make the following entries on your return. 
                            Form NJ-1040                Enter amount from:    
                            Line 41                 Line 4, column A          
                            Line 42                 Line 5, column A          
                            Line 43                 Line 6, column A          
                            Line 56               Make no entry               
        No. The Property Tax Credit is more beneficial for you. Make the following entries on your return. 
                            Form NJ-1040                Enter amount from:    
                            Line 41               Make no entry                                                                                    
                            Line 42                 Line 5, column B                                                                               
                            Line 43                 Line 6, column B                                                                               
                            Line 56       $50 ($25 if you and your spouse file separate returns but maintained the same main home). 
                                          Part-year residents must prorate this amount. (See instructions on page 30.) 

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                  Credit for Income Taxes Paid to Other Jurisdictions  
                                                        (Wage Income) 
                                          Understanding Income Tax 

 Example #11 –     continued 

 The taxpayer completes both columns A and B of Schedule NJ-COJ as well as Worksheet I to determine 
 whether they will receive a greater benefit from taking the property tax deduction or by claiming the property 
 tax credit. 

 Schedule NJ-COJ                                   Credit for Income or Wage Taxes Paid to                         
                                                   Other Jurisdiction 

    Income properly taxed by both New Jersey and other jurisdiction. (Instructions page 32) 
    Jurisdiction Name: ______________________Maryland______________________________________ 
 1. 
    Do not combine the same income taxed by more than one jurisdiction. 
    (The amount on line 1 cannot exceed the amount on line 2.)                                       1. 
                                                                                                         75,000 
 2. Income subject to tax by New Jersey (From line 29, NJ-1040)                                      2. 
                                                                                                         75,000 
 3. Maximum allowable credit percentage. Divide line 1 by line 2. (Instructions page 33)             3. 
                                                                                                         100% 
 See page 25 to determine if you are eligible for a property tax  
                                                                                            Column A     Column B 
 benefit. If you are not eligible, only complete column B. 

 4. Taxable Income (From line 39, Form NJ-1040)                              4.                      4. 
                                                                                            74,250       74,250 
    Enter in box 5a the amount from Worksheet H,                  5a.  3,600 
    line 1. (Instructions page 30)                                      
 5. 
    Property Tax Deduction. Enter the amount from 
    Worksheet H, line 2. (Instructions page 30) 
                                                                             5.             3,600    5.  - 0 - 
 6. New Jersey Taxable Income (Subtract line 5 from line 4)                  6.                      6. 
                                                                                            70,650       74,250 
 7. Tax on line 6 amount (From Tax Table or Tax Rate Schedules)              7.                      7. 
                                                                                            2,412        2,611 
 8. Allowable Credit (Multiply line 7 by line 3)                             8.                      8. 
                                                                                            2,412        2,611 
 9. Credit for Taxes Paid to Other Jurisdiction. Enter            9a.  3,433 
    in box 9a the income or wage tax paid to other  
    jurisdiction. (Instructions page 34)                               
     
    Credit Allowed. Enter the lesser of line 8 or  
    box 9a. This amount cannot exceed your New  
    Jersey tax on line 43.                                                   9.             2,412    9.  2,611 
 
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                             Credit for Income Taxes Paid to Other Jurisdictions  
                                                            (Wage Income) 
                                                    Understanding Income Tax 

    Example #11 –             continued 

    The taxpayer claims the refundable property tax credit of $37.50 (which is calculated by taking the maximum 
    credit of $50 prorated for the period of residency – in their case, 9 out of 12 months – or 75% of the year). 

                                                               Worksheet I 
                                                 Which Property Tax Benefit to Use 
                                                                                                                                                        COLUMN A     COLUMN B 
 1. Tax. Enter amounts from line 7, Schedule NJ-COJ, columns  
    A and B here ..................................................................................................................................  
                                                                                                                                                     1. 2,412     1. 2,611     
 2. Credit for Taxes Paid to Other Jurisdiction. Enter amounts from line 9, 
    Schedule NJ-COJ, columns A and B here. If you completed more than one 
    Schedule NJ-COJ, enter the total of all line 9 amounts (columns A and B) in 
    the corresponding column .....................................................................................................  
                                                                                                                                                     2. 2,412     2. 2,611     
 3. Balance of Tax Due. Subtract line 2 from line 1 in each column ............................  
                                                                                                                                                     3. -0-       3. -0-       
 4. Subtract line 3, column A from line 3, column B ...........................................................                                       
                                                                                                                                                                  4. -0-       
 5. Is the line 4 amount $50 or more ($25 if you and your spouse file separate returns but maintained the same main home)? 
    Part-year residents, see instructions for line 9, Schedule NJ-COJ before answering “No.” 
             Yes. The Property Tax Deduction is more beneficial for you. Make the following entries on your return. 
                          Form NJ-1040              Enter amount from: 
                              Line 41               Line 5, Column A, Schedule NJ-COJ 
                              Line 42               Line 6, Column A, Schedule NJ-COJ 
                              Line 43               Line 7, Column A, Schedule NJ-COJ 
                              Line 44               Line 2, Column A, Worksheet I 
                              Line 56               Make no entry 
             No. The Property Tax Credit is more beneficial for you. Make the following entries on your return. 
                          Form NJ-1040              Enter amount from:    
                              Line 41               Make no entry 
                              Line 42               Line 6, Column B, Schedule NJ-COJ 
                              Line 43               Line 7, Column B, Schedule NJ-COJ 
                              Line 44               Line 2, Column B, Worksheet I 
                              Line 56               $50 ($25 if you and your spouse file separate returns but maintained the same main 
                                                    home). Part-year residents must prorate this amount. (See instructions for line 9, Schedule 
                                                    NJ-COJ.) 
                                                            (Keep for your records) 
                                       
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                  Credit for Income Taxes Paid to Other Jurisdictions  
                                              (Wage Income) 
                                              Understanding Income Tax 

  Example #12 – Determining the credit when a part-year resident who lived and worked 
                  in another state moves to New Jersey and changes jobs to a New Jersey 
                  employer. 
  A taxpayer lived and worked in Maryland from January 1 to March 31. Their wages while a Maryland resident 
  were $25,000. They moved to New Jersey on April 1 and began a new job here, earning $75,000 for the rest 
  of the year. They file a New Jersey resident return for the nine-month period of residency here, reporting only 
  the income earned from April 1 to December 31.  

  Because their income earned while a Maryland resident is not taxed by New Jersey, and the income earned 
  while a New Jersey resident is not taxed by Maryland, they cannot claim a credit for taxes paid to other 
  jurisdictions. 

                                                   Income Subject to Tax            
                                               New Jersey              Maryland     
                                              _Resident Return_ _Resident Return_   
 Wages                                         75,000                  25,000       
 Income Subject to Tax Before                  75,000                  25,000       
 Exemptions and Deductions 
                                                                            
 Less Standard Deduction                                                    
                                                                                    
 Maryland:     2,000 × (25,000 ÷ 100,000)                              (500) 
  
 Less Exemptions:                                                                   
 Maryland:     2,100 × (25,000 ÷ 100,000)                              (525) 
 New Jersey:  1,000 × (9 ÷ 12)                 ____(750)               ________ 
 Taxable Income                                74,250                  23,975       
 (For New Jersey, From Line 39, Form NJ-1040) 
 State Tax                                     2,611                   1,107        

 Local Tax (Baltimore County – 3.2%)           _________               ____767  _   
 Total State Tax and Local Tax                 2,611                   1,874        
 Line 1, Schedule NJ-COJ                                               0.00        
 
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                  Credit for Income Taxes Paid to Other Jurisdictions  
                                          (Wage Income) 
                                Understanding Income Tax 

  Example  #13  –  Determining  the  credit  for  income,  other  than  wages,  earned  in 
                       Pennsylvania. 
  A resident taxpayer earned $50,000 in wages from their Pennsylvania employer. They are also a member of a 
  Pennsylvania partnership. Their share of the partnership’s income for the tax year is $30,000. They paid $5,150 
  in property taxes for the year on the residence they own in New Jersey and is eligible for a property tax 
  deduction or credit. 

  The taxpayer’s partnership income is subject to tax by both New Jersey and Pennsylvania. Therefore, they can 
  claim  a  credit  on  their  New  Jersey  resident  return  for  income  tax  paid  to  Pennsylvania  on  this  income. 
  However, under the provisions of the New Jersey/Pennsylvania Reciprocal Personal Income Tax Agreement, 
  their wages are not subject to tax in Pennsylvania and cannot be included on line 1, Schedule NJ-COJ. 

                                                         Income Subject to Tax   
                                                                                 
                                           _New Jersey_  _Pennsylvania_         _Both_ 
  Wages                                    50,000                                
  Partnership Income (PA)                  30,000        30,000                 30,000 
  Income Subject to Tax Before Exemptions  80,000        30,000                 30,000 
  and Deductions 
                                                                                
  Less Exemptions                            (2,000) 
  Taxable Income                           78,000                               
  (From Line 39, Form NJ-1040) 
  Tax                                      2,844         840                     
  Line 1, Schedule NJ-COJ                                                       30,000 
  
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              Credit for Income Taxes Paid to Other Jurisdictions  
                         (Wage Income) 
                         Understanding Income Tax 

 Example #13 – continued 
 The taxpayer paid $5,150 in property taxes. They will enter $5,150 on line 40a, Form NJ-1040 and also on line 
 1 of Worksheet H. They will complete only lines 1 and 2. Then they will complete Schedule NJ-COJ and 
 Worksheet I. 

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       Credit for Income Taxes Paid to Other Jurisdictions  
                                           (Wage Income) 
                                       Understanding Income Tax 

                              Worksheet H - Property Tax Deduction/Credit 
  Review the eligibility requirements on page 25 before completing Worksheet H. Part-year residents, see page 30. 

  Complete both columns of this worksheet to find out whether the deduction or the credit is better for you. 

   1. Property Taxes. Enter the property taxes from line 40a, Form NJ-1040. 
      Senior Freeze (Property Tax Reimbursement) applicants must use their base year amount.                                                                                  1.        5,150   
      (See instructions on page 30.) 
   2. Property Tax Deduction. Is the amount on line 1 of this worksheet $15,000 or more ($7,500 or more 
      if you and your spouse file separate returns but maintained the same main home)?  
         Yes. Enter $15,000 ($7,500 if you and your spouse file separate returns but maintained the 
       same main home). 
         No. Enter the amount from line 1.                                                                                                                                    2.        5,150 __  
   STOP — if you are claiming a credit for taxes paid to other jurisdictions. 
       Complete only lines 1 and 2. Then complete Schedule NJ-COJ and Worksheet I.  
       (See instructions on page 30.)  
                                                                                                                                Column A                                  Column B   
   3. Taxable Income (From line 39 of Form NJ-1040) .....................................................................       3.                                        3.                       
   4. Property Tax Deduction (From line 2 above) .............................................................................  4.                                        4.  - 0 -                
   5. New Jersey Taxable Income (Subtract line 4 from line 3).....................................................              5.                                        5.                       
   6. Tax on line 5 amount (From Tax Table or Tax Rate Schedules) .........................................                     6.                                        6.                       
   7. Subtract line 6, column A from line 6, column B ..................................................................................................................  7.                       
   8. Is the line 7 amount $50 or more ($25 if you and your spouse file separate returns but maintained the same main home)? 
      Part-year residents, see page 30 before answering “No.”  
         Yes. The Property Tax Deduction is more beneficial for you. Make the following entries on your return. 
                          Form NJ-1040     Enter amount from:   
                             Line 41       Line 4, column A     
                             Line 42       Line 5, column A     
                             Line 43       Line 6, column A     
                             Line 56          Make no entry     
         No. The Property Tax Credit is more beneficial for you. Make the following entries on your return. 
                          Form NJ-1040      Enter amount from:  
                             Line 41          Make no entry                                                                           
                             Line 42       Line 5, column B                                                                           
                             Line 43       Line 6, column B                                                                           
                             Line 56   $50 ($25 if you and your spouse file separate returns but maintained the same 
                                       principal residence). Part-year residents must prorate this amount. (See instructions 
                                       on page 30.) 

                                           (Keep for your records) 

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                  Credit for Income Taxes Paid to Other Jurisdictions  
                                                   (Wage Income) 
                                          Understanding Income Tax 

 Example #13 –     continued 

 They complete their Schedule NJ-COJ and Worksheet I as follows. 

 Schedule NJ-COJ                          Credit for Income or Wage Taxes Paid                            
                                          to Other Jurisdiction 

    Income properly taxed by both New Jersey and other jurisdiction. (Instructions page 32) 
    Jurisdiction Name: ______________________Pennsylvania__________________________________ 
 1. 
    Do not combine the same income taxed by more than one jurisdiction. 
    (The amount on line 1 cannot exceed the amount on line 2.)                              1. 
                                                                                                30,000 
 2. Income subject to tax by New Jersey (From line 29, NJ-1040)                             2. 
                                                                                                80,000 
 3. Maximum allowable credit percentage. Divide line 1 by line 2. (Instructions page 33)    3. 
                                                                                                37.5000% 
 See page 25 to determine if you are eligible for a property tax  
                                                                               Column A         Column B 
 benefit. If you are not eligible, only complete column B. 

 4.  Taxable Income (From line 39, Form NJ-1040)                         4.                 4. 
                                                                               78,000           78,000 
    Enter in box 5a the amount from Worksheet H,         5a.       5,150 
    line 1. (Instructions page 30)                                  
 5. 
    Property Tax Deduction. Enter the amount from 
    Worksheet H, line 2. (Instructions page 30) 
                                                                         5.    5,150        5.  - 0 - 
 6.  New Jersey Taxable Income (Subtract line 5 from Line 4)             6.                 6. 
                                                                               72,850           78,000 
 7.  Tax on line 6 amount (From Tax Table or Tax Rate Schedules)         7.                 7. 
                                                                               2,534            2,844 
 8.  Allowable Credit (Multiply line 7 by line 3)                        8.                 8. 
                                                                                950             1,067 
 9.  Credit for Taxes Paid to Other Jurisdiction. Enter  9a.        840 
    in box 9a the income or wage tax paid to other  
                                                                   
    jurisdiction. (Instructions page 34)  
     
    Credit Allowed. Enter the lesser of line 8 or  
    box 9a. This amount cannot exceed your New 
    Jersey tax on line 43.                                               9.     840         9.  840 
                            
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                           Credit for Income Taxes Paid to Other Jurisdictions  
                                                           (Wage Income) 
                                                   Understanding Income Tax 

  Example #13 –             continued 

  The taxpayer receives a greater benefit from the property tax deduction. They enter the amounts from lines 
  5, 6, and 7, column A, Schedule NJ-COJ, on lines 41, 42, and 43, Form NJ-1040, as indicated in the instructions 
  on Worksheet I. Their credit for taxes paid to other jurisdictions for line 44, Form NJ-1040 is $840, the amount 
  on line 2, column A, Worksheet I. Their property tax deduction on line 41, Form NJ-1040 is $5,150. Their 
  Worksheet I looks like this: 

                                                                 Worksheet I 
                                                  Which Property Tax Benefit to Use 
                                                                                                                                                      COLUMN A     COLUMN B 
  1. Tax. Enter amounts from line 7, Schedule NJ-COJ, columns  
     A and B here ...............................................................................................................................  
                                                                                                                                                   1. 2,534     1. 2,844     
  2. Credit for Taxes Paid to Other Jurisdiction. Enter amounts from line 9, 
     Schedule NJ-COJ, columns A and B here. If you completed more than one 
     Schedule NJ-COJ, enter the total of all line 9 amounts (columns A and B) in 
     the corresponding column ...................................................................................................  
                                                                                                                                                   2. 840       2. 840       
  3. Balance of Tax Due. Subtract line 2 from line 1 in each column .........................  
                                                                                                                                                   3. 1,694     3. 2,004     
  4. Subtract line 3, column A from line 3, column B ........................................................                                       
                                                                                                                                                                4. 310       
  5. Is the line 4 amount $50 or more ($25 if you and your spouse file separate returns but maintained the same main home)? 
     Part-year residents, see instructions for line 9, Schedule NJ-COJ before answering “No.” 
              Yes. The Property Tax Deduction is more beneficial for you. Make the following entries on your return. 
                          Form NJ-1040               Enter amount from: 
                              Line 41                Line 5, Column A, Schedule NJ-COJ 
                              Line 42                Line 6, Column A, Schedule NJ-COJ 
                              Line 43                Line 7, Column A, Schedule NJ-COJ 
                              Line 44                Line 2, Column A, Worksheet I 
                              Line 56                Make no entry 
              No. The Property Tax Credit is more beneficial for you. Make the following entries on your return. 
                          Form NJ-1040               Enter amount from: 
                              Line 41                Make no entry 
                              Line 42                Line 6, Column B, Schedule NJ-COJ 
                              Line 43                Line 7, Column B, Schedule NJ-COJ 
                              Line 44                Line 2, Column B, Worksheet I 
                              Line 56                $50 ($25 if you and your spouse file separate returns but maintained the same principal 
                                                     residence). Part-year residents must prorate this amount. (See instructions for line 9, 
                                                     Schedule NJ-COJ.) 
                                                             (Keep for your records) 
                                       
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                 Credit for Income Taxes Paid to Other Jurisdictions  
                                   (Wage Income) 
                                  Understanding Income Tax 

  Example #14 – Determining the credit for wage income earned in Philadelphia. 
  A resident taxpayer earned wages of $44,000 in Philadelphia and contributed $4,400 to their 401(k) Plan. They 
  determine the amount of income subject to tax by Philadelphia for line 1, Schedule NJ-COJ as follows: 

 January 1, 2023 – June 30, 2023 

 Philadelphia Wage Tax                       791.20          
                                                     = $23,000
 Philadelphia Wage Tax Rate                  .0344 

 July 1, 2023 – December 31, 2023 

 Philadelphia Wage Tax                       722.40 
                                                     = $21,000 
 Philadelphia Wage Tax Rate                  .0344 

 Income Taxed by Philadelphia                            $44,000  

                                                           Income Subject to Tax   
                                                                                   
                                              _New Jersey_         _Phila._       _Both_ 
 Wages                             44,000                          44,000          
 Less 401(k) contributions         _(4.400)_  39,600                              39,600 
 Interest                                           1,500                          
 Dividends                                          450                            
 Income Subject to Tax Before                 41,550               44,000         39,600 
 Exemptions and Deductions 
                                                                                  
 Less Exemptions                              _(1.000)_ 
 Taxable Income                               40,550                              
 (From Line 39, Form NJ-1040) 
 Tax                                                749            1,514           
 Line 1, Schedule NJ-COJ                                                         39,600 
 
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                     Credit for Income Taxes Paid to Other Jurisdictions  
                                                     (Wage Income) 
                                       Understanding Income Tax 

  Example #14 –       continued 
  The taxpayer paid $9,600 in rent for the year and is eligible for a property tax deduction or credit. They will 
  enter 18% of their rent on line 40a, Form NJ-1040, and also on line 1 of Worksheet H. They will complete only 
  lines 1 and 2. Then they will complete Schedule NJ-COJ and Worksheet I. 

                                       Worksheet H - Property Tax Deduction/Credit 
       Review the eligibility requirements on page 25 before completing Worksheet H. Part-year residents, see page 30. 

  Complete both columns of this worksheet to find out whether the deduction or the credit is better for you. 
   1. Property Taxes. Enter the property taxes from line 40a, Form NJ-1040. 
      Senior Freeze (Property Tax Reimbursement) applicants must use their base year amount.                                                                                       1.        1,728  
      (See instructions on page 30.) 
   2. Property Tax Deduction. Is the amount on line 1 of this worksheet $15,000 or more ($7,500 or more 
      if you and your spouse file separate returns but maintained the same main home)?  
         Yes. Enter $15,000 ($7,500 if you and your spouse file separate returns but maintained the 
                same main home). 
         No. Enter the amount from line 1.                                                                                                                                         2.        1,728 ___  

   STOP — if you are claiming a credit for taxes paid to other jurisdictions. 
       Complete only lines 1 and 2. Then complete Schedule NJ-COJ and Worksheet I.  
       (See instructions on page 31.)  
                                                                                                                                        Column A                                  Column B  
   3. Taxable Income (From line 39 of Form NJ-1040) ...........................................................................      3.                                        3.                        
   4. Property Tax Deduction (From line 2 above) ..................................................................................  4.                                        4.  - 0 -                 
   5. New Jersey Taxable Income (Subtract line 4 from line 3) ...........................................................            5.                                        5.                        
   6. Tax on line 5 amount (From Tax Table or Tax Rate Schedules).................................................                   6.                                        6.                        
   7. Subtract line 6, column A from line 6, column B........................................................................................................................  7.                        
   8. Is the line 7 amount $50 or more ($25 if you and your spouse file separate returns but maintained the same main home)? Part-year 
      residents, see page 30 before answering “No.”  
         Yes. The Property Tax Deduction is more beneficial for you. Make the following entries on your return. 
                      Form NJ-1040             Enter amount from:            
                             Line 41                 Line 4, column A        
                             Line 42                 Line 5, column A        
                             Line 43                 Line 6, column A        
                             Line 56               Make no entry             
         No. The Property Tax Credit is more beneficial for you. Make the following entries on your return. 
                      Form NJ-1040             Enter amount from:            
                             Line 41               Make no entry                                                                           
                             Line 42                 Line 5, column B                                                                      
                             Line 43                 Line 6, column B                                                                      
                             Line 56       $50 ($25 if you and your spouse file separate returns but maintained the same main home). 
                                           Part-year residents must prorate this amount. (See instructions on page 30.) 
                              
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                  Credit for Income Taxes Paid to Other Jurisdictions  
                                                        (Wage Income) 
                                          Understanding Income Tax 

 Example #14 –     continued 

 They enter in box 9a the tax paid to Philadelphia on $39,600, which they calculate as follows:  
 $1,514 × ($39,600 ÷ $44,000) = $1,363. 

 The taxpayer completes their Schedule NJ-COJ and Worksheet I as follows. 

 Schedule NJ-COJ                                   Credit for Income or Wage Taxes Paid to                           
                                                   Other Jurisdiction 

    Income properly taxed by both New Jersey and other jurisdiction. (Instructions page 32) 
    Jurisdiction Name: ______________________City of Philadelphia____________________________ 
 1. 
    Do not combine the same income taxed by more than one jurisdiction. 
    (The amount on line 1 cannot exceed the amount on line 2.)                                         1. 
                                                                                                           39,600 
 2. Income subject to tax by New Jersey (From line 29, NJ-1040)                                        2. 
                                                                                                           41,500 
 3. Maximum allowable credit percentage. Divide line 1 by line 2. (Instructions page 33)               3. 
                                                                                                           95.3069% 
 See page 25 to determine if you are eligible for a property tax  
                                                                                              Column A     Column B 
 benefit. If you are not eligible, only complete column B. 

 4. Taxable Income (From line 39, Form NJ-1040)                              4.                        4. 
                                                                                              40,550       40,550 
    Enter in box 5a the amount from Worksheet H,                  5a.  1,728 
    line 1. (Instructions page 30)                                      
 5. 
    Property Tax Deduction. Enter the amount from 
    Worksheet H, line 2. (Instructions page 30) 
                                                                             5.               1,728    5.  - 0 - 
 6. New Jersey Taxable Income (Subtract line 5 from line 4)                  6.                        6. 
                                                                                              38,822       40,550 
 7. Tax on line 6 amount (From Tax Table or Tax Rate Schedules)              7.                        7. 
                                                                                               676         749 
 8. Allowable Credit (Multiply line 7 by line 3)                             8.                        8. 
                                                                                               644         714 
 9. Credit for Taxes Paid to Other Jurisdiction. Enter            9a.  1,363 
    in box 9a the income or wage tax paid to other  
    jurisdiction. (Instructions page 34)                               
     
    Credit Allowed. Enter the lesser of line 8 or  
    box 9a. This amount cannot exceed your New  
    Jersey tax on line 43.                                                   9.                644     9.  714 
                                    
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                           Credit for Income Taxes Paid to Other Jurisdictions  
                                                        (Wage Income) 
                                                  Understanding Income Tax 

  Example #14 –             continued 

  The taxpayer is better off claiming the $50 property tax credit since their balance of tax after taking credit for 
  the taxes they paid to Philadelphia is only $3 less when taking the property tax deduction than it would be 
  without the deduction.  

                                                             Worksheet I 
                                              Which Property Tax Benefit to Use 
                                                                                                                                                    COLUMN A     COLUMN B 
  1. Tax. Enter amounts from line 7, Schedule NJ-COJ, columns  
     A and B here .............................................................................................................................  
                                                                                                                                                 1. 676       1. 749       
  2. Credit for Taxes Paid to Other Jurisdiction. Enter amounts from line 9, 
     Schedule NJ-COJ, columns A and B here. If you completed more than one 
     Schedule NJ-COJ, enter the total of all line 9 amounts (columns A and B) in 
     the corresponding column ................................................................................................  
                                                                                                                                                 2. 644       2. 714       
  3. Balance of Tax Due. Subtract line 2 from line 1 in each column .......................  
                                                                                                                                                 3. 32        3. 35        
  4. Subtract line 3, column A from line 3, column B ......................................................                                       
                                                                                                                                                              4. 3         
  5. Is the line 4 amount $50 or more ($25 if you and your spouse file separate returns but maintained the same main home)? 
     Part-year residents, see instructions for line 9, Schedule NJ-COJ before answering “No.” 
              Yes. The Property Tax Deduction is more beneficial for you. Make the following entries on your return. 
                      Form NJ-1040                 Enter amount from: 
                            Line 41                Line 5, Column A, Schedule NJ-COJ 
                            Line 42                Line 6, Column A, Schedule NJ-COJ 
                            Line 43                Line 7, Column A, Schedule NJ-COJ 
                            Line 44                Line 2, Column A, Worksheet I 
                            Line 56                Make no entry 
              No. The Property Tax Credit is more beneficial for you. Make the following entries on your return. 
                      Form NJ-1040                 Enter amount from: 
                            Line 41                Make no entry 
                            Line 42                Line 6, Column B, Schedule NJ-COJ 
                            Line 43                Line 7, Column B, Schedule NJ-COJ 
                            Line 44                Line 2, Column B, Worksheet I 
                            Line 56                $50 ($25 if you and your spouse file separate returns but maintained the same main 
                                                   home). Part-year residents must prorate this amount. (See instructions for line 9, Schedule 
                                                   NJ-COJ.) 
                                                          (Keep for your records) 
                                      
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                 Credit for Income Taxes Paid to Other Jurisdictions  
                              (Wage Income) 
                              Understanding Income Tax 

 Example #15 – Determining line 1, Schedule NJ-COJ when the other jurisdiction allows 
                  an adjustment to reduce income that is not allowed in New Jersey, and 
                  when  the  other  jurisdiction  taxes  income  that  is  not  taxed  by  New 
                  Jersey. 
 Two single New Jersey residents work in New York State and each earn wages of $30,000 while contributing 
 $2,000 to an IRA. Taxpayer one also has unemployment income from New York of $4,000. The schedules 
 below illustrate how to determine the amount of income taxed by both jurisdictions, specifically when there 
 is an adjustment to income allowed by the other jurisdiction, an adjustment for income excluded from line 2, 
 Schedule NJ-COJ, and an adjustment for tax paid to the other jurisdiction. 

 The  unemployment  income  of  $4,000  taxpayer one  received  is  taxed  by  New  York  but  not  New  Jersey. 
 Because they cannot include it on line 2, Schedule NJ-COJ (income taxed by New Jersey), they cannot include 
 it on line 1, Schedule NJ-COJ (income taxed by both New Jersey and New York). 

 (a) Taxpayer One                           Income Subject to Tax                
                                                                                 
                              _New Jersey_        _New York_                    _Both_ 
 Wages                         30,000      30,000                                
 New York Adjustments (IRA)                (2,000)      28,000                  28,000 
 Unemployment                                          4,000                     
 Income Subject to Tax Before  30,000                  32,000                   28,000 
 Exemptions and Deductions 
                                                                                
 Less Exemptions                 (1,000) 
 Taxable Income                29,000                                           
 (From Line 39, Form NJ-1040) 

 Tax                           438                     1,415                     
 Line 1, Schedule NJ-COJ                                                        28,000 
 
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                  Credit for Income Taxes Paid to Other Jurisdictions  
                                (Wage Income) 
                                Understanding Income Tax 

  Example #15 –    continued 

  (b) Taxpayer Two                             Income Subject to Tax     
                                                                         
                                 _New Jersey_        _New York_         _Both_ 
  Wages                          30,000       30,000                     
  New York Adjustments (IRA)                  (2,000)      28,000       28,000 
  Income Subject to Tax Before   30,000                  28,000         28,000 
  Exemptions and Deductions 
                                                                        
  Less Exemptions                  (1,000) 
  Taxable Income                 29,000                                 
  (From Line 39, Form NJ-1040) 

  Tax                            438                     1,238           
  Line 1, Schedule NJ-COJ                                               28,000 
  
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                  Credit for Income Taxes Paid to Other Jurisdictions  
                                                        (Wage Income) 
                                          Understanding Income Tax 

 Example #15 –     continued 

 For both taxpayers, the amount reported on line 1, Schedule NJ-COJ, is the same: $28,000. Since the amount 
 reported in box 9a must be the tax actually paid to New York on $28,000, taxpayer one calculates the amount 
 as follows: $1,415 × ($28,000 ÷ $32,000) = $1,238. 

 Neither taxpayer is eligible for a property tax deduction/credit. They will each complete a Schedule NJ-COJ 
 like this: 

 Schedule NJ-COJ                                   Credit for Income or Wage Taxes                                         
                                                   Paid to Other Jurisdiction 
    Income properly taxed by both New Jersey and other jurisdiction. (Instructions page 32) 
 1. Jurisdiction Name: ______________________New York State_________________________________________________ 
    Do not combine the same income taxed by more than one jurisdiction.                                      1. 
    (The amount on line 1 cannot exceed the amount on line 2.)                                                   28,000 
 2. Income subject to tax by New Jersey (From line 29, NJ-1040)                                              2. 
                                                                                                                 30,000 
 3. Maximum allowable credit percentage. Divide line 1 by line 2. (Instructions page 33)                     3. 
                                                                                                                 93.3333% 
 See page 25 to determine if you are eligible for a property tax  
                                                                                          Column A               Column B 
 benefit. If you are not eligible, only complete column B. 
 4. Taxable Income (From line 39, Form NJ-1040)                               4.                             4. 
                                                                                                                 29,000 
    Enter in box 5a the amount from Worksheet H,                  5a.                     
    line 1. (Instructions page 30) 
 5.                                                                     
    Property Tax Deduction. Enter the amount from 
    Worksheet H, line 2. (Instructions page 30)                               5.                             5.  - 0 - 
 6. New Jersey Taxable Income (Subtract line 5 from line 4)                   6.                             6. 
                                                                                                                 29,000 
 7. Tax on line 6 amount (From Tax Table or Tax Rate Schedules)               7.                             7. 
                                                                                                                 438 
 8. Allowable Credit (Multiply line 7 by line 3)                              8.                             8. 
                                                                                                                 409 
                                                                                          
 9. Credit for Taxes Paid to Other Jurisdiction. Enter            9a.  1,238 
    in box 9a the income or wage tax paid to other  
    jurisdiction. (Instructions page 34)                               
     
    Credit Allowed. Enter the lesser of line 8 or  
    box 9a. This amount cannot exceed your New  
    Jersey tax on line 43.                                                    9.                             9.  409 
                                    
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                      Credit for Income Taxes Paid to Other Jurisdictions  
                                      (Wage Income) 
                                      Understanding Income Tax 

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Email your State tax questions; 

Visit a Regional Information Center; 

Call (609) 292-6400;  

Subscribe to our NJ Tax Alert E-News; 

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The forms and amounts referred to in this Bulletin are those for Tax Year 2023. This document is designed to 
provide guidance to taxpayers and is accurate as of the date issued.  

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