I am a resident of New York but worked out of state all year, does NY tax me on that income?

[ToddL · Accepted solution]

Yes, NY taxes its residents' income no matter where they earn it.  

They will, however, give you credit (against your NY tax) for any tax you pay to another state on the same income. You will have to prepare the non-resident state return first (if any) to see how much tax you have to pay there.

The computation of your New York State (and New York City and Yonkers) income tax is based on information you reported on your federal income tax return, including your income and federal adjustments to income. If you did not file a federal return, you must report the same income and adjustments that you would have reported for federal income tax purposes if you had filed a federal return. There are no adjustments for income earned elsewhere, but there is a credit for taxes paid to other jurisdictions. 

[AZTaxGuy]

It is important to note NY's 545 day rule for those working out of New York for the long term. This rule allows you to file a nonresident return and get a refund of NY withholding after qualification until physical presence in NY voids the nonresident status.

[bmcfarland]

"You will have to prepare the non-resident state return first (if any) to see how much tax you have to pay there."  Do you actually mean the "non-domicile" return, as the other state's return is likely to be a resident return (though not necessarily)?

[singardia]

Hello,

    I thought the 548 day rule only applied when you go to another country, not another state. Is that true?

https://www.hodgsonruss.com/media/publication/126_03_2011%20The%20Nuts%20and%20Bolts%20of%20New%20Yo...

 Thank you,

  Steve

[TomD8]

@singardia -  "I thought the 548 day rule only applied when you go to another country, not another state. Is that true?"

That is correct.  See the "Group B" exception rules under the Resident section in this reference:  https://www.tax.ny.gov/pit/file/pit_definitions.htm

[mavcox]

I'm a NY resident who worked in Connecticut in 2019...

Where on the NY State return (IT-201)? do I indicate the CT taxes that I paid, in order to receive that credit?

[singardia]

You don't indicate that on the NY return. You have to complete a CT return.

Check out this article for the Taxslayer program.

https://support.taxslayer.com/hc/en-us/articles/360015704432-What-Credit-is-available-for-Taxes-Paid...

  Did you commute back and forth every day to CT for work and back home to NY ?  Or did you actually live in CT while you were working there?

[mavcox]

@singardia Thanks for your reply...
I live in NY and commute to CT...

I have completed my CT return, and my NY return... and since they both show that each state is taxing my income, I want to make sure I’m getting credit in NY, for what I pay to CT...  is there some way to confirm this?

[TomD8]

The out-of-state credit should appear on Line 41 of your New York IT-201.

[singardia]

As Tom said, it would show on line 41:    Resident credit (see page 23) ...............................................

   Also, your NY tax should be much lower than the CT tax.  The CT top rate is 6.99% and the NY top rate is 8.82%, so your NY tax should be about 1.8% of your income.  The good news is that NY is lowering their income tax over the next 5 years, so you may not owe NY anything unless CT lowers theirs too.

Lowering tax rates for the middle class   ( I believe this was passed back in March 2019)

The budget includes a continuation of lowering income-tax rates for the middle class.

The rates are dropping to 6.21% for income between $43,000 and $161,550 and goes to 6.49% for income between $161,550 and $323,200. The lower rates are being phased in until 2025, when they will fall to as low as 5.5% and 6% when the cuts are fully phased in.  

[exntrc]

I work full time out of state and have a part time remote NY job.  It seems like the non resident return form requesting information about my full federally reported income is unfair to me.  None of that income is relevant or earned in NY.  What  am I doing wrong in my calculations?

[DaveF1006]

it is asking these questions so that it knows how much income to exclude from taxation in the state. The questions may seen intrusive but are asked entirely for your benefit.

[PatsyTappen]

How do I apply for credit for tax paid to another state?

[PatsyTappen]

How do I claim the credit for tax paid to another state?