I live in NJ and worked from home from March through the end of 2020, but my employer is in NY. Do I set the allocation on the NY Return to 25%?

[MarilynG1 · Accepted solution]

If you lived in New Jersey all year, but all your income was earned from New York, you would file a Non-Resident State Return to New York to report all your income/tax paid.

Your New Jersey Resident return will give you credit for tax you paid to New York.   

Click this link for info How to File a Non-Resident State Return. 

[grkstuff]

Thank you MarilynG1.  I understand that for normal years.

I am asking specifically relating to this past year where I worked from home (NJ) and only worked in the NY Office itself from January to March.  Since I only worked in NY for the 3 months, do I set the allocation on the NY State return to 25%?

[WendyN2]

It depends on a few things:

What type of work do you perform?

Whether W2 or 1099, if this is consulting type work that you can do from home, then if W2 check to see what, if anything, they withheld on your behalf and to what State, if any.

Were you required to work from a NY office by your employer at any time or was this an "at will" locational preference?

If you are a W2 employee, then you would follow what MarilynG1 has stated above. You "earned" all of your income from NYS employer who considered you a NYS worker.

However, if you were always 1099 by this employer, or even were "switched" to this treatment after you began working from home, then you could conceivably allocate it 100% to your home State. 

An example I can give is for myself; I am a CPA - I also do public company compliance work. The Consulting firm that actually pays me for this work is out of PA - but they just pay me. Therefore my income, although W2, is RI income - my home State. I hope this helps!