You are correct and in fact NY already has a provision for you and your spouse to be considered non-resident and therefore if you have no NY source income you would not have a filing requirement in NY. Here is the NY reference.
However, since NY taxes were withheld and you wish to have those refunded you will need to file a nonresident return and allocate zero income to NY in the NY state interview. Use the steps below.
NOTE: You should change your residency state with your finance office to stop NY withholding going forward. Your spouse if applicable should do the same with their employer(s).
- In "My Info" "Edit" your information to verify/indicate active duty military status.
- Select the state you are currently assigned in as the state your resident state on 31 Dec.
- Answer "No" to Did you live in any other states?"
- Continue
- Scroll down to "Other State Income"
- Answer "Yes" to Did you earn income in another state?"
- Select "NY"
- "Wages and Income"
- "W2"
Enter/Verify form entries and be sure to select "Military Active Duty Pay" in the follow on question for "Uncommon Situations"
- Complete the federal interview
- "Start/Continue" the NY state nonresident interview.
- In the "Income" section you will be able to allocate zero to NY.
- This should generate a NY refund for the taxes withheld.
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