@ParkNYC wrote:
Thank you both @TomD8 @Opus 17. Unfortunately, we lived two months in NYC in 2024 so that's why they're so aggressive and not willing to change withholding taxes. We'll see what happens. Right now, we are dealing with W2 forms mess, it appears, that although we lived only two months in NY and they in July finally stopped charging NY taxes, the box 16 (state wages) on NY state W2 form matches Box 1 (federal), which is untrue. NJ W2 forms show properly, NJ income for 10 months is smaller that Box 1, but I know that NY in 2003 changed the law and require employers to match state wages with federal wages on W2 forms. How do we adjust this? Should we adjust this on It-203 nonresident Federal-State Income and Adjustments worksheet? For example, if we lived in NYS for 2 months and they charged us NY tax for 6 months, should we only calculate those 2 months as the NY state taxable amount? What about 4 months extra we were charged NY taxes?
Thank you,
If you lived in NY at any time in 2024, and you work remotely for your own convenience, then ALL the income from the NY employer is considered NY taxable income. If she works remotely for the convenience of her employer, then only income earned while living in NY is taxable to NY.
Were you permanent residents of NY for 2 months before moving? If so, you need to file as a part-year NY resident. Or did you always have your permanent residence in NJ, and temporarily lived in NY? Then you are a non-resident the whole year.
Regardless, unless her employer assigned her to work in NJ for their reasons, you are subject to the full weight of the convenience of the employer rule. All her NY income is taxable to NY on a non-resident return, regardless of what box 16 and 17 say. In Turbotax, you must indicate that you are residents of NJ and have non-resident income in NJ. Turbotax may attempt to allocate the income based on the W-2 but you can also manually adjust the allocation. All her employee income is NY income, but any other income (pension, gambling, interest, investments, etc.) is only NJ income (unless it is effectively connected to NY, such as selling real estate in NY). She pays non-resident income tax on the NY income, and you pay resident tax in NJ on all your world-wide income. NJ will give you a credit against double taxation.
