How much of my non-resident income from is considered to be received from a New York Source if I worked remotely during the time I lived outside of New York?

[zxiong89]

I have the same job, Software Engineer, which the company is primarily based in New York but the position is listed as remote. For some of the year, I lived in one state working remotely and then moved to New York while continuing to work remotely. I'm not sure if the time during which I lived outside of the New York, was my job considered to be received from a New York Source

[MarilynG1]

If the company is based in New York, and they took New York State Tax from your wages all year, it sounds like all your income is from a 'New York source'.

If you file a Part-Year Resident return for the state other than NY you lived in, and declare the income you earned while living there, that state should give you credit for the NY tax you paid on that income, so you should owe no tax to that state; you are simply reporting.  Prepare this return before your NY return. 

If your employer did withhold NY tax for you all year, your Part-Year Resident Return to NY will be straightforward.  They'll tax all your income and hopefully the tax paid was sufficient so you don't owe (and may even get a refund).

Here's more info on Part-Year Resident Returns and FAQs for NY Filing Requirements, and Telecommuting. 

[zxiong89]

So I double-checked one of my pay stubs during the time I was a non-resident and did not see any taxes taken out for New York State. Is that considered a non New York source at that point?

Again, my position is completely remote even though my employer is primarily based out of New York. Also I should add that the whole time I was a non-resident of New York, I did not perform any services for my company in New York, as in I never traveled to New York to work.

[Vanessa A · Accepted solution]

New York is one of the few states that DO tax remote workers in certain instances.  They have what is known as the Convenience of the Employer Rule. So if your employer requires you to work from home then you then it is not taxable to NY.  If it is not for your employers convenience then it IS taxable to you whether or not you physically go to NY or not. 

It doesn't really matter whether or not your employer withholds taxes or not, it only matters if it is for your convenience or their convenience.  If you were going to the office up until you moved to another state and they allowed you to work remotely, it would be for your convenience and you would need to pay taxes to NY for this income as a non resident. 

[TomD8]

@zxiong89 --

Actually, your employer was correct not to withhold NY taxes when you were a non-resident of New York.

Here is what the New York Appellate court ruled:

"A nonresident who works in another State but who performs no work in New York is not subject to New York State tax liability no matter for whose convenience or necessity he performs the work."

https://casetext.com/case/hayes-v-state-tax-comm

If you never physically worked in NY, not even for a single day, during the time that you were not a resident of NY, then your work income from that period of time is not taxable by NY.

New York's "convenience of the employer" rule applies only to non-resident taxpayers who work both within and without New York State during the tax year.