AmyC:
Thanks for pushing me to the form. Looking at it was enlightening.
Lines 1 to 31 have the NY and Federal amount with parallel adjustments and then uses the Federal amount in the Deductions (lines 33-36) and Tax Computation (lines 37 to 43) sections to establish the base tax on Line 44 on the Federal Amount. The Allocated NY State Tax on Line 46, while it is adjusted, is still based on the Federal amount.
I did a test where I removed all the other income and compared it to the total family income. I owe twice the amount of taxes for the full family (where my withholding was underpaid) than if my NY income was our only income (and my withholding was overpaid).
Is the real answer: NY uses the allocation and ratio method for taxing non-residents based on my Federal AGI after some adjustments?
