@drheidi If you are in fact living and domiciled in California, your employer cannot tax you as a resident of New York State. What it sounds like is happening, is that they are withholding NYS taxes because you are assigned to a NY office. If there is any presumption that you might go to NYS for work purposes, this is the correct way to handle. If, however, its clear in your employment agreement/paperwork that you are a fully remote employee working year round in CA, you shouldn't have NY withholdings. You can file an IT-2104.1 listing the 0% and nonresident status, and see if they accept that.
As it relates to CA taxes, they should be withholding those regardless. CA is a physical presence state. Meaning even if NYS considers them NY workdays and subject to tax in NYS, CA also considers them CA workdays and subject to tax in CA. Its important that you get a professional involved, because you may not be entitled to claim a tax credit in your home state of CA, for taxes paid in NY, because of the incongruence of the laws. The last thing you want is to be subject to tax in both NYS and CA on the same income.
Kristine L. Bly, EA Private Client Services / Residency / Tax Controversy
Partner, Cohen & Company
