@SK14 wrote:
While I have lived in Manhattan and paid taxes there for the last 3 years, I have never officially established residency as I plan to not live there permanently. I have a Texas Drivers License, am registered to vote in Texas, and have credit cards and bank accounts with my Texas address.
That doesn't matter in this case. NY and NYC will consider you a "resident" if you live and/or work in NY for 183 or more days (half a year) even if you don't formally establish a New York "domicile." You have been required to file a NY and NYC income taxes as a resident for the last few years.
For 2020, if you moved before 183 days, you are a non-resident or part-year resident for 2020, if you lived in NY more than 183 days, you are either a full year resident or a part-year resident. You are a full year resident if you plan to move back to NY. You are a part-year resident if you don't plan to ever move back.
@SK14 wrote:
My company is in Manhattan, New York where I was based. With COVID happening and everyone moving to remote work, I went back to Houston, Texas to work from home.
I understand there's a rule about necessity vs convenience but my company decided to close the office in New York until COVID is completely over. Since we no longer have a physical location, I couldn't work in an office even if I wanted to, so I am not working from home out of convenience.
The rule about the convenience of the employer means that, once your employer told you to leave or shut the office, you are no longer subject to NY state and city tax when working remotely. However, if you went back to Texas voluntarily at first, that period of time may count as NY wages. Or if you stayed in the city after the office told you to telework, that is NY income because you were living there.
Since Texas has no state income tax, this represents a material amount. My company has withheld New York state income tax so I'm not sure the process to get that money back. Any help would be much appreciated!
You will file either a NY part-year resident or non-resident tax return. Filing as a non-resident will be tricky since you were considered a NY resident in 2019, and the way you can call yourself a non-resident for 2020 is by relying on the fact that you were never domiciled in NY and were only a resident due to the 183 day rule. It might be questioned.
I will take the position that you will file a New York return as a part-year resident. You will give the date that you moved back to Texas as the date your NY residency ended. Turbotax will ask you to allocate your full year income (from your W-2 box 1 wages) to New York. Your New York income is the income you earned while you were a NY resident, plus any income earned after you moved to Texas but before the company made the move mandatory.
For example, suppose you moved on April 30, but the company only asked workers to leave on May 31, and closed their office permanently on June 30. Your wages up to April 30 are NY wages because you were a resident. Your wages from May 1-May 31 are NY wages because you were working in Texas for your convenience. Your wages from June 1-the end of the year are not NY wages because you were working remotely for your employer's convenience. On the other hand, if the company ordered workers to work remotely starting May 1, but you only moved on June 30 due to your lease, then your wages through June 30 are NY wages since you were a resident the entire time even if you were working from home.
In Turbotax, you will show the entire amount withheld for NY (from your W-2). Assuming you show only a partial year NY income, you will be over-withheld and will get a NY refund when you file your NY tax return.
Separately, you should be able to cancel your NY withholding by contacting your HR department.
