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Level 1
posted Jul 1, 2020 6:50:05 AM

Freelance work for out of state clients

Hi,

 

I have a question regarding allocation of state taxes, for quarterly estimates.

 

 I’m a resident of California with freelance clients in NY, with my work Being produced in California(desktop/digital work). Aside  from owing California state tax, do I also owe NY state taxes as a non resident since it’s ”NY source income”? I don’t see why since it’s produced in California and since it seems to make having multiple multi-state clients administratively clunky.

 

Would appreciate any insight on this. 

Thanks

KJ

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1 Best answer
Level 15
Jul 1, 2020 8:20:22 AM

New York Tax Law 631(B)(1)(B) states that New York-source income includes income attributable to "a business, trade, profession or occupation carried on in this state."

 

Since you don't work for a New York employer, and your work was not carried on in New York, the income from that work is not New York-sourced, and therefore it is not subject to NY taxation.

https://casetext.com/statute/consolidated-laws-of-new-york/chapter-tax/article-22-personal-income-tax/part-3-nonresidents-and-part-year-residents/section-631-new-york-source-income-of-a-nonresident-individual

2 Replies
Level 15
Jul 1, 2020 8:20:22 AM

New York Tax Law 631(B)(1)(B) states that New York-source income includes income attributable to "a business, trade, profession or occupation carried on in this state."

 

Since you don't work for a New York employer, and your work was not carried on in New York, the income from that work is not New York-sourced, and therefore it is not subject to NY taxation.

https://casetext.com/statute/consolidated-laws-of-new-york/chapter-tax/article-22-personal-income-tax/part-3-nonresidents-and-part-year-residents/section-631-new-york-source-income-of-a-nonresident-individual

Level 1
Jul 2, 2020 5:40:02 PM

Thanks, Tom!

 

Makes sense with what I originally thought, But the wording can get a bit tricky so had to double-check.

Appreciate it!

 

KJ