property taxes with two states and new york state itemized

[celcoco]

when we have 2 states, say NJ and NY and the home is at NJ and paid property tax for NJ home. 

I found that the NY state return itemizing include this property tax as well. Is this correct? because that property tax was paid for NJ home. 

if not correct, how do I enter correctly or fix? as in federal tax section there is no section to select which state of property tax belongs to

[ErnieS0]

Yes. TurboTax is doing your taxes correctly. All federal itemized deductions are included on your New York return (that's how NY calculates taxes).

You don’t say whether you are filing a resident, part-year, or non-resident NY return.

If you are a resident, NY taxes all your income, so you can claim all your federal deductions.

If you are a part-year or non-resident, NY will prorate your itemized deductions according to the NY percentage of income versus total income. So if you earned 50% of your income in NY, you’ll get 50% of your itemized deductions.

[celcoco]

i am indeed NonResident for NY and Resident for NJ.

Federal is also using Standard Deduction instead of Itemized Deduction. Under this scenario, is it still correct to the use paid NJ property tax inside the itemized deduction for NY?

If it is not correct, then how could I remove or adjust this amount in Turbox Tax Desktop.

[ErnieS0]

Yes. It is still correct. New York uses your total income from everywhere (after NY adjustments) to come up with NY adjusted gross income.

Since all your income was included in the calculation of NY AGI, your total NY itemized deductions are subtracted to arrive at NY taxable income.

NY then computes a base tax, which is the tax you would pay if all your income was earned in NY. Your actual tax is the base tax multiplied by your percentage of NY income.

For example, if you earned $100,000 everywhere, then your NY base income would be $100,000. If the NY tax on $100,000 is $x and you earned $50,000 in NY then your part-year/non-resident tax would be 50% ($50k/$100k) of $x.

[celcoco]

maybe my question is not very clear. want to confirm few items.

1. can Federal use standard deduction while NY state using itemized deduction?

2. how about the $5k Dependent care FSA which is counted as income in Federal, do we need to have it as income for NY state as well? seems like there is no such options.

[Cynthiad66]

Yes, if you claimed the Standard Deduction on your federal return, you can still itemize your deductions on the New York return. You must complete the Itemized Deductions section of the federal return.

With a Dependent Care FSA, you use pre-tax dollars to pay qualified out-of-pocket dependent care expenses. The money you contribute to a Dependent Care FSA is not subject to payroll taxes, so you end up paying less in taxes and taking home more of your paycheck.

"Money used for qualified expenses from the FSA is free from taxes."

About FSAs for NY

@celcouch