Can I exclude spouse income when filing non-resident state return?

[Lefty0521]

I am an Alabama resident with my husband.  He works in Alabama and I work for a college in NY remotely.  We usually file MFJ.  Do I have to include his income when filing a NY non-resident return IT-203?  And do we have to include my income on our Alabama taxes even if I didnt work in Alabama? I entered the taxes paid for NY and we still owe taxes to Alabama.

Would married filing separately make a difference? We were under the impression that our Alabama taxes would be impacted by my NY income but it seems that it is.  

Please help!

[Vanessa A]

For Alabama, yes, all income from all sources is taxable to AL if you are a resident of that state. 

If you are working remotely, and you live in AL, then you are working in AL, not NY. 

You would not need to file a NY return, unless you are working remotely for your convenience and not for the Convenience of your Employer.  If you were hired from the start as a remote worker, then this is not likely and your income would not be taxed by NY.

If you do need to file a NY return, then no, you would not need to include your husbands income on your NY Non-resident return. You would then take a credit on your AL return for taxes you pay on the income from NY that will offset the taxes you owe to AL.

[TomD8]

If you never set foot in New York for your work during the tax year, not even for a day, then the convenience of the employer rule does not apply, and you have no tax obligation to New York for your work income.

In that situation you would only have to file a non-resident NY tax return if NY taxes were mistakenly withheld from your pay, and you would be doing so only to have those taxes refunded.

[Bereli]

Thanks, @Vanessa A 

I am working remotely for my convience and will need to file a non resident ny return.  

I am filing MFJ on my federal return and when moving on to the state portion in Turbo Tax, it included my husband's income.  How can I take this off? He only worked in AL.

[DawnC]

When you go through the NY return, you can tell TurboTax what income belongs to NY; don't include your husband's income.  Allocate only your income on the NY return.  @Bereli