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I have three W2s (one for NJ and 2 for NY) and a 1099-Misc (for NJ). Do I need to fill out nonresident business allocation schedule to allocate NY state business income?

 
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JulieCo
New Member

I have three W2s (one for NJ and 2 for NY) and a 1099-Misc (for NJ). Do I need to fill out nonresident business allocation schedule to allocate NY state business income?

It depends. If your only income for New York is from the W-2 income, it would appear that you would not have any non-resident business income (meaning you don't own and operate a business in New York and other states) so you would not have any non-resident business income to allocate and, thus, not need to fill out the allocation form.

For more information, here are the requirements of when a Non-Resident Business Allocation Schedule (IT-203-A) is required for NY.  

An allocation of business income must be made if you are a nonresident and you carry on business both in and out of New York State. Business is carried on out of the state if you have, maintain, operate, or occupy desk space, an office, a shop, a store, a warehouse, a factory, an agency, or other place where your business matters are systematically and regularly carried on outside New York State. 

An occasional or isolated business transaction out of the state will not permit an allocation of income. In addition, if you have no regular place of business out of the state, you may not allocate any income for business carried on out of the state even though you or your representatives may travel out of the state to perform duties connected with the trade or business and may make sales or perform services for out-of-state individuals or corporations. 

If you carry on business both in and out of New York State and maintain accounts clearly showing income from the New York business, complete Schedule A of Form IT-203-A, and mark an X in the box for New York income determined from books. Do not complete Schedule B.

If the New York income of the business cannot be determined from your books, you must determine income from business carried on both in and out of New York State in accordance with the statutory formula or an alternative method approved by the New York State Commissioner of Taxation and Finance. Complete Schedules A and B following the specific instructions on this page. Even though Schedule B may not fairly reflect the income from New York and you use an alternative allocation method, you must complete Schedule B. Submit a detailed explanation of the alternative method used to determine New York income, together with full details of any modifications increasing or decreasing the amount of New York income computed by the alternate method. The modifications are described in the instructions for Form IT-203

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