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fabickfo
New Member

I and a Massachusetts resident earned money as a student in another state(41$) yet that state(NY) is trying to use all my federal income as tax ?

 
1 Reply
ToddL
New Member

I and a Massachusetts resident earned money as a student in another state(41$) yet that state(NY) is trying to use all my federal income as tax ?

First, when completing the Personal Interview, make sure you did not check "Yes" when asked "Did you live in another state in 2016?" That question only applies when you change your state of residence during the year. As a general rule, students remain residents of their home state when attending an out-of-state school.

What you are seeing now is accurate, but NY is still not taxing the income you made outside of NY.

Your total 2016 pay appears in the NY forms, summaries and interviews because NY uses your entire AGI to calculate your tax on NY income.  They do this  even if you were a resident of New York for 1 day. 

(Changing the "Didi you live in another state?" answer should make this go away. If it doesn't, you still aren't paying NY tax on non-NY income). 

It isn't, however, as bad as it appears. They calculate what your New York tax would have been if you earned everything in NY, but then prorate that tax based on how much of your income was earned while a NY resident (or in NY).

For example, if the NY tax on your entire 2016 income was $10,000 but only 30% was earned as a NY resident, your NY tax would be 30% of $10,000 = 3,000.

Why do they do this? So they can tax your NY income at the highest possible tax rate, based on your entire AGI.

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