Solved: Determining date of residency change - MA to NYC
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jlook13
Level 1

Determining date of residency change - MA to NYC

Hello, I'm having a pretty tough time determining the date of my state residency change. Would really appreciate the help with the following:

 

For background, I work for a company that is based in MA, and at the start of the year I was living in Boston. I was visiting a friend in NYC mid-March right before the COVID lockdowns started, and as a result I ended up staying in NYC and telecommuting (working remotely) from NYC, and set up temporary mail forwarding to NYC. Given that my lease in Boston was up at the end of July, I decided to stay in NYC full-time with my friend for the forseeable future, and to continue working remotely for the same company in MA. I went back up to Boston at the beginning of July and moved my things to my friend's place in NYC, and officially changed my address to NYC on a permanent basis in July. I have therefore been working remotely from NYC since March 2020, although my new apartment in NYC did not become my official permanent residence until July 2020. My company has only been deducting MA state income taxes.

 

Given the above, would the date of my residency change from MA to NYC be:
a) mid-March - given that I started working remotely in NYC for my company in MA

b) beginning of July - when I moved my things to the address I had been since mid-March

c) end of July - when my Boston lease ended

 

Thank you!

1 Best answer

Accepted Solutions
TomD8
Level 15

Determining date of residency change - MA to NYC

When you move from one state to another, the general rule is that you become a resident of the new state on the day you begin living in your new permanent home (your new domicile) in the new state.  So I would use the date in July when you abandoned your MA domicile and made the NY residence your new permanent home. Your income from that date forward is entirely taxable by NY.  Your employer should be withholding NY taxes.  If they cannot withhold NY taxes, you should begin making quarterly estimated tax payments to NY.

 

For 2020 you will file a part-year resident tax return in each of the two states.  Note that the income you earned by working remotely in NY prior to its becoming your state of residence is taxable by NY, as well as by your then-domicile state of MA.  So the income you report on your part-year resident NY tax return must include both your NY-source income from your period of non-residence as well as all your income after becoming an NY resident.  (NY-source income is income you earn from work actually performed in NY.) See page 18 of this web reference for NY's instructions on how to allocate income in your situation:  https://www.tax.ny.gov/pdf/current_forms/it/it203i.pdf

 

On your part-year MA return, you'll be able to claim a credit for the tax paid to NY on the portion of your income that is taxable by both states, so you won't be double-taxed.  Your income after becoming an NY resident is not taxable by MA unless you physically work inside MA.

 

 

**Answers are correct to the best of my ability but do not constitute tax or legal advice.**

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2 Replies
MissMCJ
Level 4

Determining date of residency change - MA to NYC

I would advise you to use the date when you officially changed your address.

TomD8
Level 15

Determining date of residency change - MA to NYC

When you move from one state to another, the general rule is that you become a resident of the new state on the day you begin living in your new permanent home (your new domicile) in the new state.  So I would use the date in July when you abandoned your MA domicile and made the NY residence your new permanent home. Your income from that date forward is entirely taxable by NY.  Your employer should be withholding NY taxes.  If they cannot withhold NY taxes, you should begin making quarterly estimated tax payments to NY.

 

For 2020 you will file a part-year resident tax return in each of the two states.  Note that the income you earned by working remotely in NY prior to its becoming your state of residence is taxable by NY, as well as by your then-domicile state of MA.  So the income you report on your part-year resident NY tax return must include both your NY-source income from your period of non-residence as well as all your income after becoming an NY resident.  (NY-source income is income you earn from work actually performed in NY.) See page 18 of this web reference for NY's instructions on how to allocate income in your situation:  https://www.tax.ny.gov/pdf/current_forms/it/it203i.pdf

 

On your part-year MA return, you'll be able to claim a credit for the tax paid to NY on the portion of your income that is taxable by both states, so you won't be double-taxed.  Your income after becoming an NY resident is not taxable by MA unless you physically work inside MA.

 

 

**Answers are correct to the best of my ability but do not constitute tax or legal advice.**

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