Me and my spouse are filing Federal taxes jointly. I was a resident of New York City for all of 2023 and my spouse lived and worked in upstate, a nonresident of NYC for all of 2023.
Then in TurboTax I got into this screen of "New York City and Yonkers income splitting", where it asks to allocate dollar amounts of interest, dividend, capital gain/loss income between us. From the learn more: "Allocate income, adjustments, itemized deductions and corresponding tax liabilities to each of you. The allocated amounts serve as the basis for calculating New York City and/or Yonkers tax."
The allocation will affect my tax return. For example, if I allocate all those income to my spouse, no more local taxes on those income.
Question 1: What are the guidelines to do the allocation? Should I allocate those income evenly?
Question 2: Moreover, is wage income re-allocatable?
The option is not in the step-by-step screen. But the allocation is changeable in the "Taxpayer/Spouse Income Allocation Worksheet" form.
Here is what I found Form IT-201 instructions regarding Line 51, but still unable to conclude an answer from it: If one spouse was a resident of New York City and the other a nonresident for all of 2023, compute [...] the New York City resident tax on the New York State taxable income of the city resident as if you had filed separate federal returns...
Thanks!
