I am a self-employed and am a PA state resident. This year, two of my clients were from New York (I was signed on as an independent contractor for them) so I am filing a NYS tax return in addition to a PA tax return, but I am stuck on the question of whether I need to file a Nonresident Business Allocation Schedule to allocate New York State Income.
I do not own or rent a desk/office space in New York, but have traveled to New York to conduct part of my services (photographer for live events) for these clients, while the rest of my services (editing photos/managing social media) were conducted remotely in PA for these same clients.
If you are Self-Employed and paid on a 1099-Misc, all of your income is considered to be earned from your Home Office in Pennsylvania.
Even though you traveled to New York to work with clients or at client events, you don't have to file a tax return there.
Click this link for more info on Self-Employment and Taxes .
Thanks for your reply! I'm still confused, though, since this {removed} says that since I made income out-of-state I will need to file a nonresident state return. Is this only for W2 wages or income and excludes 1099?
Yes, when you are Self-Employed, your income is considered to be earned from your Home Office, no matter where your services were performed.
Those bullet items in the link you sent don't apply to you.
I had this same question about New York (though I live in another state).
Thank you for your clear answer!
Yes, you will need to report income earned in NYS if some of your income is derived from NY sources. If you traveled to New York to perform work but weren't paid by a New York source, then technically this is not NY based income. Please look on page 7 of this NY State link that addresses income reporting requirements for NY non-residents.
I did freelance writing work for a New York publication entirely from outside of the country. In the NonResident Business allocation section, I was asked: Do you need to file a Nonresident Business Allocation Schedule to allocate New York State Income? I have no idea how to answer this question.
It depends.
If your income was generated as part of a business located within New York, you would be subject to taxes on this income and would need to allocate this income to New York.
If this applies to you, then you would answer yes to the nonresident business allocation.
This seems to contradict the information above. I earned money consulting for a NY hospital while living in Maryland. I was sent a 1099-NEC. Do I need to allocate this income to NYS and do I need to fill out a Nonresident Business Allocation?
No you do not need to fill out a nonresident business allocation. As you prepare your NYS non-resident return, there are screens that will appear that will allow you to allocate your entire income. In your case, you would only need to allocate your 1099-NEC income to NYS.