Form 2104.1 Adjustments

[rahi4567]

On April 2018, I accepted an job offer in NYC as a CT resident. On Oct 2018, I received an email from my company's Payroll Department stating that I elected not to deduct NY state tax from my pay (A mistake on my part). The email went on saying that they changed my tax elections on my behalf.

In 2019, when it came time to time my 2018 return, I ended up having to repay NY state about $1400 in taxes (April-OCT 2018). I used my return from CT tax return to pay NY.

My question is whether or not CT state potentially  owes me money for my 2018 state return after paying NY state their unpaid taxes. I would like to assume that they do but I believe i'm just confusing myself at this point.

I appreciate any helpful comments in regards to this.

Thank You,

Rahi

[Bsch4477]

If I understand your situation, your NYS tax liability was incurred by you.  The fact that you may have used a a CT tax refund (is that what you are writing?) doesn't change your responsibility for paying the NYS tax.

[rahi4567]

I used the money I got back from CT state tax return to simply pay what I owed NY State leaving me no tax liability to the state. What I’m asking is since I didn’t pay NY state tax from April - October 2018, did  my CT return basically include NY state tax from April - December or starting November - December (post change made by my company). 

[TomD8]

Since you're a CT resident, CT can tax ALL your income, regardless of where you earn it.

NY can tax you as a non-resident on income you earn from work actually (physically) performed within New York state, and on income you earn from a NY employer as a telecommuter from CT, if you telecommute for your own, rather than your employer's, convenience  (this is known as the "convenience of the employer" doctrine).

You can take a credit on your CT return for the taxes you pay to NY state on income that is taxed by both states, so you won't be double-taxed.

Because you can take that credit, your NY employer should be withholding NY taxes.  Most, if not all, of your actual tax bill will be owed to NY.

So you will be filing two state tax returns: a non-resident NY return, AND your regular home state return.  In TurboTax, be sure to complete your non-resident NY return first, before you work on your home state CT return.  That way, the credit will flow properly.

If your NY employer requires you to telecommute from CT, the tax situation would be different.  In that case, your telecommuting income (from a CT location) would be taxable only by CT.