State tax filing

Opus 17 · ‎July 13, 2021

@anonymous283 wrote:

I don't have a home in NY - haven't been there longer than a few days since Dec 2019. Not going to pay $3k+ yearly to a city I don't live in... I have protested the refund - just spent an hour on the phone with NY - they didn't seem to know I protested - now they see it and say they have 120 days from the day I protested to respond...

This is very long but please read the whole thing carefully. Read it twice.

First of all, a phone call is not enough, you must document everything in writing, save copies, and get proof of mailing, so you can prove you met and deadlines for protest or appeal.

Now, we have to review the concept of domicile. Your domicile is your permanent home. There is no single factor that determines where your domicile is, it is based on examination of all the factors. Things that show where your domicile is includes where you actually live, where your significant friends and social relationships are, your home church, where your significant legal and financial arrangements are (like your attorney, your doctor, dentist, and so on), and other similar factors. You only have one domicile at a time, no matter how many homes you might own.

In addition, when you move, in order to establish a new domicile, you have to take active steps to abandon your prior domicile. This would include things like canceling your lease, changing your voter and car registration, getting a new drivers license, signing a new lease, and so on. Again, there is not one single factor or test, it depends on all facts and circumstances.

From everything you have said, I believe NY is correct in assessing that you did not abandon your NYC domicile until August, 2020, and therefore you owe NYC tax as a part-year resident. You can continue to protest, but I think you have very little likelihood of succeeding.

Here is what NY state says,

Domicile

In general, your domicile is:

the place you intend to have as your permanent home
where your permanent home is located
the place you intend to return to after being away (as on vacation, business assignments, educational leave, or military assignment)

You can only have one domicile. Your New York domicile does not change until you can demonstrate that you have abandoned your New York domicile and established a new domicile outside New York State. For more information, see the instructions for Form IT-201 or Form IT-203.

https://www.tax.ny.gov/pit/file/pit_definitions.htm

Here is a blog from an attorney,

https://www.hodgsonruss.com/domicile-residency-law.html

Now, if you were domiciled in NYC until August 2020, you would only owe city tax on about 8/12th of your income, not all of it, and you would need to prepare a part-year NY state resident return, rather than a non-resident return (which you probably prepared) or a full year resident return. If the only thing you failed to do was cancel your lease, but you did everything else to abandon NYC and establish a new domicile in MA (like changing your voter, car registration and driver's license, getting a new doctor, and so on) you might have a case, but you have to focus on the proofs that will show you abandoned your NYC domicile and set up a new MA domicile.

Separately, we also have to consider whether you owe income tax as a New York non-resident from September 2020 to December 2020, and including 2021.

New York assesses income tax to anyone who works remotely for a NY-based employer if the reason the employee works remotely is for the employee's convenience. If the remote work is for the employer's convenience, NY does not tax it.

For example, if you are a graphic designer and choose to work from home in MA, but your employer has office space for you and you could work in NY if you wanted to, you owe NY state income tax (but not city tax). However, if you were a sales person and your territory was in MA, and your company wants you to live close to your territory, then you are working from home for your employer's requirements and you don't owe NY state income tax.

For 2020 you need to determine if you are subject to the convenience of the employee rule. If you are working remotely for your own convenience, you owe a fairly complicated 2020 tax return; it will tax you from January to August as a NY state and NYC resident, and will tax you from September to December as a state non-resident (and no city tax after August). You will also owe MA a part-year resident tax return for the income earned after you changed your domicile. If you pay NY state tax on income earned after August due to the convenience of the employee rule. MA will give you a credit so that you don't pay double state tax on the same money. For 2021, if you are subject to the convenience rule, you will continue to owe NY state income tax as a non-resident.

If you are working from MA at the request of your company, then you owe a 2020 part-year resident return to NY that will apply NY state and city income tax to your earnings from January to August, and you owe MA a part-year resident return that pays MA tax on your earnings from September to December.

This is important:

If you are determined to be a NY resident for 2020, then you probably paid too much MA state income tax. You will be able to file an amended MA state return which will credit you some or all of the NY tax you have to pay. If you are a resident of NY up until August 2020, you can't be a full year resident of MA, and you can file an amended part-year MA resident return to get some of your MA tax back.

You need professional help at this point.