How do I get refunded on the taxes as a NY resident but working in CT, if I am getting double taxed by both NY and CT?

[anikr761-gmail-c]

Hi,

I am looking for some suggestions and steps that should be taken before filing taxes.

I have moved to Connecticut for my first job from NY. I am originally from NYC and am a NY resident. Currently I am paying taxes for both states, which arouses some questions:

- Because I am working in CT, shouldn’t I be refunded the NY tax? How much do we get credited, is it the entire tax charge? When do we get credited, is it with our tax return?
- Do I pay NY tax because I am a NY resident or Do I pay CT tax because I am working in CT?
- What needs to be done or which form needs to be filled out to process this credit?
- What does withholding taxes for a state mean?

In gist what steps must be taken to avoid the second state tax that is being paid on every pay intervals and how to get a refund on these taxes.

Any suggestion helps, thanks!

[Vanessa A · Accepted solution]

When did you move to CT?  Did you live there for all of 2023? Which state do you actually live in and which state do you work in? "I have moved to Connecticut for my first job from NY.......Do I pay NY tax because I am a NY resident or Do I pay CT tax because I am working in CT?"

If you are a resident of CT and working in CT, then you would only pay taxes to CT.  If taxes were withheld for NY, then you would file a non resident return claiming $0 income, but showing your withholdings so you can get a refund of the taxes you paid to NY. You would file a CT return reporting all of your income.  

If you are resident of NY and work in CT, then you would pay taxes to both.  You would file a CT nonresident return, then you would file a NY resident return and take a credit for the taxes paid to CT  on your NY return.  You would need to do CT first so you know your tax liability to CT so you can enter it on your NY return.

Basically, whichever state you live in will tax all of your income from ALL sources, just like the federal government does.  The state you work in will tax the income you earn working in that state.  So you will have to file a nonresident return for the state you work in and pay taxes on that income.  Then you will file a return for the state you live in and claim a credit for the taxes you paid to the state you work in.  

If you lived in the state for part of the year, the same principal applies, however, you would prorate the wages for the state you lived in.  In other words if you worked in CT all year, but lived in NY for half the year and CT for the rest of the year, the amount you earned while living in NY would be taxable to NY even though you worked in CT.  All of it would be taxable to CT.  

How to File a Part Year Return. 

How to file a Nonresident state return

[anikr761-gmail-c]

Hi Vanessa,

Thank You so much for your response, this is some great info that was much needed! I never got an email notifying your response, hence the reason for my belated reply.

Regarding filing taxes for 2023 and to answer your questions, let me give you an overview of my workflow from 2023

• (January – June): No Income/ NY Student/ lived in NY and studied in NY. As always I received a 1098-T form for 2023 tuition statement.
• July: NY Income of a small amount/ lived in NY and worked in NY/ Received W-2 with NY address.
• August – December & up until now: CT Income/ lived in CT and worked in CT/ Received W-2 with CT address

I am a New York State resident, but I am not sure if I become a CT resident the day I start living here. But it’s been 6+ months that I have been living here in CT (Sept – Now). However, the number of months living in CT for 2023 would be 4 months. FYI, I updated my CT address with my company 1 month after I started working which is in October (not sure if it’s anything important).

Now a few questions to your response,

• Am I considered a CT resident now, since I have been living here for more than 6 months? In that case, I can just file a CT Return and an NY non-resident Return claiming $0 income? 
• If I am still considered a NY resident and CT non-resident for 2023, why do I claim for taxes paid to CT on my NY Return, shouldn’t I be claiming for taxes paid to NY instead? 
• If I am claiming for CT taxes which is less than NY taxes, in reality, I will be actually getting credited less money, right? Does this mean even that though I am not working and living in NY, I still have to pay some NY tax?
• Regardless of all the situation, I am still filing a CT Return first, correct? The only concern comes when I am claiming, and that would be in a NY Return, right? 
  

Would really appreciate it if you could give me your last advice based on my situation and what would be the right steps going forward, as I am very reluctant to pay NY tax because, it’s firstly not fair and secondly more than CT, lol.

I was included in my parent’s tax file all these years as a dependent. So any form related to tuition and small income has been stated on their tax form. Now since I have a job I need to file separately, which is why I am trying to make sure that I do it right. 

Attached is a portion of a screenshot that shows the double state status. I also just wanted to re-make sure if this means that taxes were withheld by both NY and CT? Although it does say State 1 and State 2 but only includes the CT Income Tax under the description (no NY Income Tax).



THANKS!

[TomD8]

With regard to your residency for tax purposes, the issue is one of domicile.  In tax terminology, your domicile is your primary, main home.  It's the place you intend to return to after an absence.  

If in 2023 you left your domicile in NY and began living in CT with the intent of CT being your new domicile, then for 2023 you are a part-year resident of each of the two states.  If that's the case you became a resident of CT on the day you began living there with the intent of making it your new domicile.

But if you went to CT temporarily, while keeping and intending to return to your main home in NY, then for 2023 tax purposes you are a non-resident of CT and a resident of NY.

If you can clarify the above, we can tell you how to file your 2023 taxes.

[anikr761-gmail-c]

Hi TomD8,

I am considering CT to be my current domicile and prefer to be the resident of this state due to my decision for a long stay period at the company.

I have talked to my HR and it looks like my taxes are withhold for CT only. In that case I don’t think I really need to do a NY non-resident tax return for that period to claim for any refund. But I still don't understand why my paystub includes a status for both STATE 1 (CT) and STATE 2 (NY), as well as the W-2 form. 

Considering all the scenarios, should I be filing a part year CT Resident Tax Return and a part year NY Resident Tax Return? Also, because my NY Income was too low, can I just keep it simple and just do NY non-residency tax return instead of part year?

If that’s possible, what would be considered optimum –

• Part-year NY Resident Tax Return & CT Resident Tax Return? Or
• CT Resident Tax Return & NY non-resident Tax Return?

Thanks!

[Vanessa A · Accepted solution]

July: NY Income of a small amount/ lived in NY and worked in NY/ Received W-2 with NY address.
August – December & up until now: CT Income/ lived in CT and worked in CT/ Received W-2 with CT address

Based on the information you posted above, No, you cannot file as a NY Non-Resident.  You will have to file as a NY Part Year Resident and a CT Part Year resident.  You do not need to worry about any credits for taxes paid to the other state because when you lived in NY, your income was from NY not CT and when you lived in CT, your income was from CT, not NY.  

This means you are basically filing a return reporting income on each return like you would if you lived in each state for the entire year except you will need to add the dates you lived in those states.  You will not need to allocate any income.  

So, BOTH states will need to be Part Year returns.  You cannot file a full year resident return for CT.

"If you are a part‑year resident, you may not elect to be treated as a resident individual. If you are a part-year resident and you meet the requirements of Who Must File Form CT-1040NR/PY for the 2023 taxable year, you must file Form CT‑1040NR/PY" Connecticut Nonresident and Part-Year Resident Income Tax Information