Garden State residents have reported a bumper crop of audit notices from New York in recent months. All these notices have one thing in common: The state wants to review how New Jersey residents with New York-source income allocated their income to the Empire State on their 2020 New York personal income tax returns. These notices — and New York’s generally aggressive response to post-pandemic tax enforcement — are sure to create a host of multistate tax problems and the potential for double taxation. This article considers the next steps for New Jersey residents responding to the New York notices, including the availability of offsetting credits on their New Jersey returns.

Originally published in Tax Notes State - August 2, 2021.