Filing jointly with my wife. Her state of residence is New York but neither of us have New York source income. How do I reflect this?

[ChristinaS · Accepted solution]

If you choose to file a joint return with your wife, all of your income gets to be taxed by New York.

No matter what state you live in, your state of residence gets to tax all of your income. It doesn't matter where it was made when you are a resident. However, you get a credit on your home state's return for taxes paid to the state(s) that you earn the money in. The credit is featured rather prominently in the New York interview, as its a commonly used one.

You are not required to file a joint return with the State of NY if one of you is a resident and the other is a nonresident. You can choose to do so, but if you do, you are agreeing to be taxed as a NY resident.

See NY return instructions, page 13:

https://www.tax.ny.gov/pdf/current_forms/it/it201i.pdf

If one spouse is a New York State resident and the other is a nonresident or part-year resident. In this case, you must either: (a) file separate New York returns using filing status 3 or (b) file jointly, as if you both were New York State residents, using filing status 2.

[ChristinaS]

If its not advantageous for you to also be taxed as a NY resident, and your name is listed first inside Turbo Tax, you will need to create another Turbo Tax username. Create a "mock" Married Separate federal return and transmit the NY sep return (of your wife) by itself. Don't transmit the federal return, as its used only as a conduit to prepare the NY return.

[ChristinaS]

<a rel="nofollow" target="_blank" href="https://www.tax.ny.gov/pdf/current_forms/it/it201i.pdf">https://www.tax.ny.gov/pdf/current_forms/it/...>
Sorry, this is the instructions link.

[vaibh843]

@ChristinaS , if I am a part year resident and my spouse is a non resident of NY and if we are filing joint state return (as there is no option to file separate return per IT 203 instructions) , do I then have to include my spouse's income too for the residency period if we file joint return ? (i.e. does she also become a part year resident for tax purposes) ?

[Cynthiad66]

Yes.   But NY return has an allocation of income section that will walk you through separating the income and who worked where.  NY appears to be taxing all income but in actuality the allocation properly applies the taxes accurately by providing a credit to your home state for taxes paid in NY.

Your Home state is determined by where you lived on December 31,2022.

@vabh843