jest.config.js

const nextJest = require("next/jest");
const { pathsToModuleNameMapper } = require("ts-jest");
// In the following statement, replace `./tsconfig` with the path to your `tsconfig` file
// which contains the path mapping (ie the `compilerOptions.paths` option):
const { compilerOptions } = require("./tsconfig");

const createJestConfig = nextJest({
  // Provide the path to your Next.js app to load next.config.js and .env files in your test environment
  dir: "./",
});

// Add any custom config to be passed to Jest
const customJestConfig = {
  setupFilesAfterEnv: ["<rootDir>/jest.setup.js"],
  testEnvironment: "jest-environment-jsdom",
  roots: ["<rootDir>"],
  modulePaths: [compilerOptions.baseUrl], // <-- This will be set to 'baseUrl' value
  moduleNameMapper: pathsToModuleNameMapper(
    compilerOptions.paths /*, { prefix: '<rootDir>/' } */
  ),
};

// createJestConfig is exported this way to ensure that next/jest can load the Next.js config which is async
module.exports = createJestConfig(customJestConfig);