Oh and I should have said that the answer to the main question is that the taxpayer should use form IT-203-B to identify the day worked in NY, and source the prorata portion.
Based on the original question it sounds like the employer properly withheld only one day, but reported the full income amount. Which suggests the employer is also in agreement here.
If the taxpayer gets audited, they should call their employer for support. Their employer would want to defend this position. Its likely they have other telecommuters, and agreeing to this would potentially create exposure to them for withholding tax purposes.
Kristine L. Bly, EA Private Client Services / Residency / Tax Controversy
Partner, Cohen & Company
