Ouch! Try letting your tap water sit for 24 hours and test it again to see if maybe it changes or dissipates somehow. You may end up having to buy bottled (NOT distilled) water for your fish.
That's kind of gross but apparently considered safe for humans if it was allowed into your water supply. Maybe buy a few gallons for yourself while you're at it (I wonder if a Brita would help with this, but would take out too many minerals for the fish's water), and consider contacting the water company to see if this is actually normal.
I'm guessing this means you have chloramine in your water. Many people's water is treated with it instead of chlorine nowadays. It's chlorine bonded with ammonia to make it more stable.
Unfortunately, it's difficult to remove. Most water conditioners remove the chlorine and convert the ammonia (nh3) into ammonium (nh4+) which is relatively harmless to fish. Your biological filter will then process the ammonium.
The test kit you have tests for BOTH nh3 and nh4+ and gives you the sum total of both. What you'll need is a test kit which only tests for free ammonia (nh3) to determine whether the ammonia in your water is dangerous to fish. I use Multitest: Ammonia by Seachem.
(I wonder if a Brita would help with this, but would take out too many minerals for the fish's water)
I think it would help... I don't think it would be to bad for your fish either. All thats in a brita filter that filters your water is active carbon... And whats in your fish tank? Active carbon :D Not sure if theres different kinds but they do that same thing I would imagine..
Hehe- already checked on that too. Brita (and all the other pitchers or attach to tap filters) won't remove chloramine or ammonia. It wouldn't hurt to use if you already have it. But there's no actual point in using it.