I'm not sure I understand what you are saying. If the client worked in New York but resided in New Jersey, the state of New Jersey would consider ALL of those wages earned in NY as taxable for purposes of the NJ 1040. On the NJ 1040 it credits any tax payments made to New York as an offset against the tax owed to New Jersey. This doesn't explain why a W-2 would be issued by the employer showing wages different in New Jersey, unless I'm missing something. If anything, given tax law in New Jersey, BOX 16 on the New Jersey W-2 statement should reflect the total wages earned as I stated above.