The way that the
NY state tax return calculates nonresident NY tax: NY looks at all of your income from all
sources and generates a tax on all this income. When NY
is determining the actual NY state taxes owed, NY multiples the total NY
taxes on all income by the percentage of NY source income over all source
income.
So if your income from all sources is $10,000 but
your NY source income is $8,000, NY will calculate the NY state tax on $10,000
then multiply the total state taxes generated by 80% ($8,000/$10,000). So even
though you all your income is being reported on your NY state tax return,
you are only being taxed on the NY source portion of your total income.
I do not know why it is calculating NYC taxes.