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ridetimeless18
Level 1

Employer automatically withdraws NY state tax, but I'm a permanent resident in Florida. Will NY refund my state taxes when I file for 2021?

Thanks for the help! I moved to Florida in 2020 and became a permanent resident there, having bought a home (my primary and sole residence) in Miami. I work remotely for my employer's NY office, and my employer automatically continues to withdraw NY state tax from each paycheck. Will NY State refund my state taxes when I file for 2021, given that I'm a FL resident the entire year and spend no time in NY?

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Accepted Solutions
Opus 17
Level 15

Employer automatically withdraws NY state tax, but I'm a permanent resident in Florida. Will NY refund my state taxes when I file for 2021?


@ridetimeless18 wrote:

SO helpful, thank you very much, sir! So for all the tech companies that closed their offices for the year and required remote work, the out of state work would be at the employer's convenience, not the employee's, correct? You're the man, thanks again. 


Generally, yes.  If the company required workers to work remotely, the income would not be subject to the "convenience of the employee" rule.  You should ask HR to change your state withholding.  However, if the business reopens their offices and invites workers back, and you choose to continue to work remotely, you will probably be subject to the convenience rule again.  

 

Note that if you travel to NY to conduct business, your income will be partially taxable in NY.  For example, if you are required to attend in-person meetings 2 business days a month, NY will consider that 10% (2/20ths) of your income is NY-source income and will require a non-resident tax return.

 

The other important factor will be to prove, if asked by NY, that you really have established a permanent residence or domicile in another state.  If you are considering moving back to NY after the pandemic, you might still be considered to be domiciled in NY, even though you are away for a long time.  I have recently written at length on the topic of domicile here

https://ttlc.intuit.com/community/state-taxes/discussion/re-multiple-state-tax-returns-with-foreign-...

 

and the PA state web site has a very thorough discussion of the concept. 

https://www.revenue.pa.gov/FormsandPublications/PAPersonalIncomeTaxGuide/Pages/Brief-Overview-Filing...

 

 

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

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3 Replies
Opus 17
Level 15

Employer automatically withdraws NY state tax, but I'm a permanent resident in Florida. Will NY refund my state taxes when I file for 2021?

Maybe, but it's complicated.

 

NY is one of 7 states that taxes you on earnings from in-state companies even if you live out of state.  The key is whether you work out of state for the employer's convenience or your own convenience.  If you work remotely for your own convenience, you pay NY tax on the income.  You don't pay NY tax on other out-of-state income like other jobs, or investments, so you will file a NY non-resident return and report your wages earned from a NY employer if you are working remotely for your own convenience.  

 

For example, if you are a repair technician for a medical equipment company and your territory is Florida, then you are working in Florida for the company's convenience.  If you are a graphic designer, and the company has a New York office where you could work, but they let you work remotely, then you are working remotely for your own convenience.  It's also possible your status would change during the year, for example, if you are working remotely for your own convenience, and then the company decides to close their physical office and have all their employees work remotely, then your situation has changed with that decision. 

*Answers are correct to the best of my ability at the time of posting but do not constitute legal or tax advice.*
ridetimeless18
Level 1

Employer automatically withdraws NY state tax, but I'm a permanent resident in Florida. Will NY refund my state taxes when I file for 2021?

SO helpful, thank you very much, sir! So for all the tech companies that closed their offices for the year and required remote work, the out of state work would be at the employer's convenience, not the employee's, correct? You're the man, thanks again. 

Opus 17
Level 15

Employer automatically withdraws NY state tax, but I'm a permanent resident in Florida. Will NY refund my state taxes when I file for 2021?


@ridetimeless18 wrote:

SO helpful, thank you very much, sir! So for all the tech companies that closed their offices for the year and required remote work, the out of state work would be at the employer's convenience, not the employee's, correct? You're the man, thanks again. 


Generally, yes.  If the company required workers to work remotely, the income would not be subject to the "convenience of the employee" rule.  You should ask HR to change your state withholding.  However, if the business reopens their offices and invites workers back, and you choose to continue to work remotely, you will probably be subject to the convenience rule again.  

 

Note that if you travel to NY to conduct business, your income will be partially taxable in NY.  For example, if you are required to attend in-person meetings 2 business days a month, NY will consider that 10% (2/20ths) of your income is NY-source income and will require a non-resident tax return.

 

The other important factor will be to prove, if asked by NY, that you really have established a permanent residence or domicile in another state.  If you are considering moving back to NY after the pandemic, you might still be considered to be domiciled in NY, even though you are away for a long time.  I have recently written at length on the topic of domicile here

https://ttlc.intuit.com/community/state-taxes/discussion/re-multiple-state-tax-returns-with-foreign-...

 

and the PA state web site has a very thorough discussion of the concept. 

https://www.revenue.pa.gov/FormsandPublications/PAPersonalIncomeTaxGuide/Pages/Brief-Overview-Filing...

 

 

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