That's correct, but it doesn't mean that New York is taxing the full federal income. The way New York calculates the tax, it first calculates tax on your entire federal income, after New York adjustments. But then it applies an "income percentage" that is your New York income as a percentage of your total income. That's how it adjusts the tax based on how much of your income is taxable by New York. You can see this on page 3 of Form IT-203, on lines 45 and 46. It uses the New York amount and the federal amount from the two columns on line 31 to calculate the income percentage.
