The employment offer came from the NY company. Payroll, tax withholding, benefits are all handled by the CPEO based in California. I was surprised to see that the W-2 was issued by the CPEO rather than my employer.
The CPEO withheld Colorado state income tax not NY.
The NY employer has offices in NY, but like many other employees I have never set foot in NY for work and training. Everything was done remotely. The NY employer has verbally committed to maintaining the remote work arrangement indefinitely.
Without the CPEO, it would be pretty clear that I need to file a NY non-resident state income tax return.
The CPEO-issued W-2 made me wonder if the convenience rule does not apply since it feels like my legal employer is actually the CPEO which is not a NY based company.
That said, after reading the definition of the convenience law, it looks like this whole issue is about whether or not the income was sourced from NY. It does not matter if the employer is not based in NY, in other words, the rule still applies because the income was sourced from the business in NY. Is this a correct interpretation?
