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State tax filing
"In general, if you work from home out of state, you are only taxed by New York on your wages if you have an office in New York but you choose to work from home, meaning your could work in-state but choose not to."
Yes, this is the "Convenience of Employer" rule.
"if your employer requires you to work out of state from your home, you will not be taxed by New York"
This can help some cases I guess and probably a good audit trigger so I'd guess have to back it up of course. My case is work is highly networked and distributed world wide (both team members and customers) and be located closer to family. Work from home in WA often to avoid daily commute to office.
Anyway, NYS tax for multi-year allocation for vested RSU use IT-203-F Sched B. Calculations for # days worked in NY are line 6-17. The calculation sequence basically treat all work from home including after moving away (non resident) as work in NY. Line 15-17 is where it does this and the directions doesn't say "count the number of work from home days while resident of NYS". Rather, its basically says "# of work from home days in the entire RSU allocation period is working in NYS"
https://www.tax.ny.gov/pdf/current_forms/it/it203fi.pdf
https://www.tax.ny.gov/pdf/current_forms/it/it203f_fill_in.pdf
This treats moving out of NYS with still vesting RSUs like a big business trip. Anytime you work from home after moving away is like either 1) returning to NY State 2) working for the NY based company despite moving to a different company location in a different state and processing payroll there. Will consult with CPA on this but the calculations is quite clear and unambiguous.
Furthermore, there are recent tax court rulings in 2024 that says "if any NY work day is performed during allocation period, then the entire vested RSU is taxable to NYS" This goes even beyond the NY workday allocation fraction described by NYS's own tax law. Below is the case summary. Perhaps reading actual court documents might yield more detailed reasoning. Also linked the 20 132.24 ruling (stock based compensation taxation) and 20 132.18 ruling (defining what is NY income)
https://www.law.cornell.edu/regulations/new-york/20-NYCRR-132.24
https://www.law.cornell.edu/regulations/new-york/20-NYCRR-132.18
132.18 is basically rephrasing "Convenience of the Employer" rule. It says moving away from NYS has to be based on the necessity of the employer and not at the convenience of employee. What is necessity can be grey area given modern tech worker's fully distributed teams and customers.
Covid19 work from home employer policies also generated ample court cases around the "Convenience of Employer" rule for wages. So far, it seems all courts have ruled in favor of this rule. NH and MA went to Supreme Court on this issue but the court didn't take the case. This rule seems to be increasingly the determining factor for non resident taxation. Increasing the scope to tax non residents on their post exit RSU vests.
Can't find any clarification on if changing the state of payroll processing matters to exclude NY workday.
Anyway, tax law in this area has ample ambiguity and wide range of scenarios. Tax courts have been quite active so I guess a high audit risk if want to pay less taxes than 100% NY resident.
