topic I relocated to NC, but my employer is in NY, do I still have to pay NY State Taxes? in State tax filing

I relocated to NC, but my employer is in NY, do I still have to pay NY State Taxes?

bgkoussa — Tue, 27 Oct 2020 02:04:45 GMT

I moved to NC this year but my employer is in NY. As per https://www.tax.ny.gov/pit/file/pit_definitions.htm#resident

& Form IT-2104.1

I am a Group A and so I am no longer a resident of NY - as opposed to when I used to live in NJ and commuted to NY. I no longer commute to NY and expect to be in NY less than 30 days a year. Infact I spent only 25 days in NY in 2020 (mainly due to covid).

Appreciate any help understanding my 2020 situation and how to file for 2021 from a state perspective.

Re: I relocated to NC, but my employer is in NY, do I still have to pay NY State Taxes?

Hal_Al — Tue, 27 Oct 2020 11:08:37 GMT

It depends on why you moved to NC and how you work in NC. That is, whether you work from home or in the employer's facility and the nature of the work you do.

If you work from home, for your convenience, you are subject to NY tax. Your employer is most likely aware of this rule and will withhold NY tax.

Telecommuting. If you work outside the state as a job requirement, you are only subject to New York State income tax on the days you work in New York. But if you work outside New York for your own convenience, you are subject to New York State income tax on all your income. Pennsylvania, Nebraska, Delaware and New Jersey have the same rule. For guidance see: http://www.journalofaccountancy.com/issues/2009/jun/20091371.html

Here's a link to New York's memorandum on its "convenience of the employer" tax doctrine regarding non-resident telecommuters: https://www.tax.ny.gov/pdf/memos/income/m06_5i.pdf

Re: I relocated to NC, but my employer is in NY, do I still have to pay NY State Taxes?

Hal_Al — Tue, 27 Oct 2020 11:14:20 GMT

If you moved in 2020, you will file as a part year resident of both NY and NC. Assuming you don't meet the convenience of the employer rule, you will pay tax to NY on all your salary. You will pay tax to NC on the salary (and other income) earned after the move. NC will give you a credit, or partial credit for the tax you pay NY.

Once you are a full year NC resident (2021?), you will file a NY non resident return and pay tax to NY on all your NY based salary. You will also pay tax to NC on the salary . NC will give you a credit, or partial credit for the tax you pay NY.

Re: I relocated to NC, but my employer is in NY, do I still have to pay NY State Taxes?

bgkoussa — Tue, 27 Oct 2020 14:18:07 GMT

Thanks - I understand this scenario as it is the same I used to do when living in NJ.

Re: I relocated to NC, but my employer is in NY, do I still have to pay NY State Taxes?

bgkoussa — Tue, 27 Oct 2020 14:22:31 GMT

Thank you for the detailed feedback and the resources. I did move out of convenience based on the definitions in those articles so it seems my tax situation would be similar to when I used to live in NJ.

Re: I relocated to NC, but my employer is in NY, do I still have to pay NY State Taxes?

bgkoussa — Tue, 27 Oct 2020 14:28:02 GMT

I also found this executive order:

https://taxnews.ey.com/news/2020-1411-new-york-senate-[product key removed]-businesses-to-treat-income-earned-working-from-home-outside-new-york-due-to-covid-19-as-exempt-from-ny-income-tax-and-withholding

Not sure if this is passed.

Re: I relocated to NC, but my employer is in NY, do I still have to pay NY State Taxes?

TomD8 — Tue, 27 Oct 2020 15:20:09 GMT

@bgkoussa -- The legislation you referred to (NYS Bill No. 08386) is still in committee. It has not yet passed.

https://nyassembly.gov/leg/?default_fld=&leg_video=&bn=S08386&term=2019&Summary=Y&Actions=Y

In any case, it applies only to workers who are working remotely on a temporary basis due to Covid.

Re: I relocated to NC, but my employer is in NY, do I still have to pay NY State Taxes?

bgkoussa — Tue, 27 Oct 2020 15:31:19 GMT

Thanks @TomD8 and @Hal_Al for your help so far. I think this pretty much clears it for me.