Thank you for the response. This answers one question but leaves two to be answered. Clearly since these payments are for "past services" they are fully taxable by NY State per what you sent.
Unlike the State, NY City tax depends solely on residency (i.e. if you live outside NY city you do not pay city tax even if you work in the city). So since I was not a resident of the city when these payments were made it seems I would not owe city tax on the payments received after I moved away. i.e. NY city does not tax payments received from NYC sources, just resident income, which it no longer was. I can not imagine that anyone who lives in NY City and then moves to a town outside the city and gets a December bonus proportions that to the time he lived in and out of the city.
I suspect since I am domicile in CA when I received these payments one could argue that I need to declare them on my CA taxes and take a credit for the taxes I paid to NY on my CA return, although I wonder if CA would know or care given they are being taxed in NY State?
Does that seem reasonable? In any case it is going to an interesting filling year.
