USA Other Jurisdiction Tax Credit

[gturner1956]

Hi all! I reside in NJ and received an audit notice from the state of NJ that my 2018 return had a mistake when calculating a tax credit for working full-time in NYC. After reviewing the return, I noticed that the auditor did not deduct the alimony I paid for 2018 from my NJ income subjected to NJ tax while he did for the NY income actually taxed, which made for a nearly 20K difference between the two numbers. This lowered my tax credit and now I owe NJ several hundred dollars to make up for the tax deficiency.

Before I submit a complaint to the state tax commission, is this the correct way for NJ to determine how much income should actually be taxed - before alimony as a tax deduction is considered or it should have subtracted from the alimony and hence lower my income to be taxed by NJ?

BTW, I used TaxAct to do the tax return so it should have caught this discrepancy, yes?

Thanks in advance for your feedback