Rental property in another state. Do I need to file for that state even though I don't live there?

[jalxr]

Live In Texas, but rental property is in New York.  Do I need to file for New York state?

[DS30 · Accepted solution]

Yes. If you have a rental property located in NY, then this rental income will be considered NY sourced income so you will need to file an NY nonresident state income tax return.

Some additional information about NY state income taxes:

NY taxes all the income reported when calculating NY state income taxes (whether resident, part-year resident or nonresident) but you will only be required to paid a portion of the total NY state income taxes calculated (your percentage of the total NY tax that relates to your NY source income only)

The way that the NY state income tax return works is that NY looks at all of your income from all sources and generates a total NY state income tax on all income. When NY is determining the actual NY state income taxes that you owe, NY multiples the total NY taxes on all income by the percentage of NY source income over all source income. So if all your income is $10,000 but NY source income is $8,000, NY will calculate the NY state income tax on $10,000 then multiply this total tax by your NY source income over total income ($8,000/$10,000) to get your percentage of NY state income taxes on your NY source income. So in this instance, your NY state income tax liability would be 80% of the total amount of NY taxes generated (on all income). That is why all your income is being reported on your NY state tax return.

You can preview your NY Tax summary to see what portion of the total taxes for NY you are actually paying

To preview NY Tax Summary:

• TurboTax Online sign-in, click Here
• Under Tax Timeline, click on Continue your return
• Go to "My Account" > "Tools"
• Under the Tools Center, select "view tax summary"
• Select "NY Tax Summary"

[hellotax1111]

What if I live in NY part of the year and own rental property in another state (IL), how would that be handled? Would that be considered NY resident income for the time I lived in NY?

Or could it not be considered income for NY and a nonresident IL can be filed since I did not live in IL?

[DavidD66]

If you are a non-resident of New York, but live there part of the year, an Illinois rental income would not be taxable by New York.  If you are a part-year resident of New York, the a portion of the income from the Illinois rental would be taxable by New York.  Like any other state with a state tax, any income earned or received while a New York resident is taxable by New York.

[hellotax1111]

Thank you