topic Renting an apartment in NYC for temporary work from home. Do I pay NYC taxes? in State tax filing

Renting an apartment in NYC for temporary work from home. Do I pay NYC taxes?

DollyWoodPigeon — Tue, 29 Sep 2020 03:45:49 GMT

My permanent home and company is in CA and I can work remotely right now. I'm considering leasing an apartment for a year with a family member in NYC to work and live there. Does that open me up to being taxed in NY or NYC if I'm on a rental lease? I intend to return back to CA to my permanent home/domicile. Does having another family member on the lease help me some way? If I spend 183 days or more or keep a "permanent place of abode" in NYC than they will think I'm a resident?

Re: Renting an apartment in NYC for temporary work from home. Do I pay NYC taxes?

TomD8 — Tue, 29 Sep 2020 13:45:48 GMT

As a non-resident of NY, you will be taxed on any NY-source income. Income is "sourced" where the work is actually (physically) performed. Therefore any income you earn by working remotely from NY is taxable by NYS. It would also be taxable by your resident state of CA. You would therefore file a non-resident NYS tax return in addition your normal CA resident tax return. You would be able to take a credit on your CA return for tax paid to NYS on the income that is taxed by both states, so you wouldn't be double-taxed. Non-residents are not liable for NYC income tax.

NYS and NYC will both tax you as a resident if you maintain a permanent place of abode (such as a leased apartment) in NYS/NYC for more than 11 months of the year and spend 184 days or more (any part of a day is a day for this purpose) in NYS/NYC. If you do this, plus maintain your permanent home or domicile in CA, you would have to file as a resident in both states. In that situation you would be a domiciliary resident of CA and a statutory resident of NYS/NYC - a circumstance known as dual residency.

Here is NY's detailed definition of "permanent place of abode":

https://www.tax.ny.gov/pubs_and_bulls/tg_bulletins/pit/permanent_place_of_abode.htm

Re: Renting an apartment in NYC for temporary work from home. Do I pay NYC taxes?

DollyWoodPigeon — Tue, 29 Sep 2020 15:27:06 GMT

Thank you for the detailed explanation!

Quick follow-up. In my situation, if my company isn't withholding any NY state tax (e.g. payroll) for me, do I have to do something, like make quarterly payments of tax to the NY tax department?

Re: Renting an apartment in NYC for temporary work from home. Do I pay NYC taxes?

TomD8 — Tue, 29 Sep 2020 20:00:12 GMT

@DollyWoodPigeon

Yes, you should make estimated tax payments to NY. See this reference for details:

https://www.tax.ny.gov/pit/estimated_tax/who_must_make.htm