Deductions & credits

For part year and nonresidents, New York calculates tax liability based on total income for the year. Then, the state applies an "income ratio" to the tax liability to prorate the income so that you're only paying tax on the percentage of income you earned within the state.

For example:

Assume your total income for the year is $120,000. You earned $50,000 in Oregon and $70,000 in New York.

New York calculates tax on the entire $120,000. That would give us about a $6,300 tax liability on the full amount of income.

Then the state calculates an income percentage based on the income that was earned within the state: $70,000/$120,000 = 58% approx

Using the 58% income percentage, the tax liability is reduced to about $3,600.

Through this process, you'll see that New York actually doesn't tax the full year's worth of income. However, for this calculation to work properly it's important to allocate the income properly within TurboTax. 

When working through your New York tax return, you'll come to a screen that asks about income allocation.

Next you'll be asked if you have any New York only wages. If you worked for the same company in both states, choose No here. If you worked for a different employer in New York than you did in Oregon, and all the income earned from that employer were only earned in New York, choose Yes.

If you chose No on the previous screen, you'll see a screen asking how much of your income was earned while living in New York. Enter the New York portion of income in the box.

The next screen will ask if you had earned income in New York while living outside of New York. Enter the appropriate amount.

Follow the prompts on the remaining screens to complete your return.

Once you get to the New York tax summary screen, you should see the income allocation factor that prorates your tax.