Tax Law (Questions About Taxes)/NJ tax

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Question
NJ schedule ABC form says divide line 2 into line 1.

I have on line two 40,000 and line one 10,000
Will it make 4 or 1/4?

It makes a confusion because they use word "into" instead of "By"
thanks

Answer
10/40=.25=25% credit

If your tax in NJ is 100 and tax in state x is 30, you can only offset your NJ tax by 25.  If your tax in state x is 20, you only get a 20 cr we sit in NJ

Lesser of not actual tax paid.    Essentially it is rate arbitrage. If you also worked in higher tax state NJ only loses the pro rata amount you would have paid if you earned the income in nj.  Not the amount you actually paid the state

Tax Law (Questions About Taxes)

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Tax and general business including hospitality related (hotel mgmt degree and experience in industry prior to obtaining ms tax and cpa).

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