topic NY nonresident: IT-182 allowed rental loss bigger than NY wages — what happens to the excess? in State tax filing

NY nonresident: IT-182 allowed rental loss bigger than NY wages — what happens to the excess?

kgz1 — Thu, 26 Feb 2026 23:09:58 GMT

Hi all — I’m a resident in MD (NY nonresident) with:

~$3,000 NY-source wages (RSUs that vested after I moved, but sourced to NY because they were earned while I worked in NY)
A NY rental property with a $5,000 net loss
On my federal return, that $5,000 rental loss is “unallowed/suspended” due to passive activity loss limits (my federal AGI is > $150k).

For NY filing (IT-203 + IT-182), I’m trying to understand:

Does IT-182 potentially make the full $5,000 “allowed” for NY because NY modified AGI (line 6) is low (basically the ~$3k NY wages)? I don't have other NY sourced income/gains.
If NY allows the full $5,000, can I net it against the $3,000 NY wages on IT-203 (so NY taxable income becomes negative and NY tax becomes $0)?
What happens to the extra $2,000 loss beyond the $3,000 wages:
- Does NY carry it forward in any way (as a passive loss carryover or NY NOL), or
- Is it effectively used up / provides no benefit in NY this year (other than reducing NY tax to $0 and refunding any NY withholding)?

I’m mainly confused about whether NY has any mechanism to preserve the excess loss when NY-source income is smaller than the allowed loss.

Thanks!

Re: NY nonresident: IT-182 allowed rental loss bigger than NY wages — what happens to the excess?

AmyC — Tue, 03 Mar 2026 18:40:21 GMT

Yes. The IT-182 will hold the loss.

1. IT-182 does require a federal PAL be recomputed based on your NY modified AGI. Your entire $5,000 NY loss is allowed for NY purposes.

2. Yes, you will have a negative income and allow any NY tax withheld on the RSU to be refunded to you.

3. The $2,000 loss is a net operating loss. You can carry it forward to offset future income.

Reference: NY Nonresident

Re: NY nonresident: IT-182 allowed rental loss bigger than NY wages — what happens to the excess?

kgz1 — Tue, 03 Mar 2026 18:56:17 GMT

Thanks! Just to confirm:
1. Based on my NY modified AGI, does this mean that for IT-203, I should put -5000 on line 11 for NYS amount even though my federal amount is $0?
2. How would I mark the $2,000 loss as a net operating loss? Do I put it manually on a form?

Re: NY nonresident: IT-182 allowed rental loss bigger than NY wages — what happens to the excess?

MarilynG1 — Fri, 06 Mar 2026 02:32:33 GMT

Yes, you can claim your full loss of 5K on New York IT-203. TurboTax does track NOLs for you, but does not calculate them. You'll see the amount on your Carryover Worksheet, and may need to manually enter into TurboTax in the Property Profile of the Rental Section, where you're asked about a carryover loss.

You'll be able to claim any NOL remaining when you sell the property, if you're not able to use them over the years.

Here's more info on IRS Form 8582: Calculating Passive Activity Losses for Real Estate.

@kgz1