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Level 1

I live in Washington DC but my employer is based in NY. How do my state taxes work?

I know that I will have to pay NY state taxes because of how handles taxes based on my employer being there.

 

So I would first file a NY state non-resident tax form, and pay NY state taxes. Then I would file a DC resident state tax form. Is that correct?

 

Would I get credit in DC for 100% of the state taxes I paid in NY? I want to be sure I won't get double-taxed on the same income. 

 

Thanks in advance!

2 Replies
Employee Tax Expert

I live in Washington DC but my employer is based in NY. How do my state taxes work?

Yes, do the two states in the order you suggest, then look at line 1 of Schedule U on your DC return and see if your New York state taxes appear there as a credit in DC.

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Level 15

I live in Washington DC but my employer is based in NY. How do my state taxes work?

...........but, 100%credit ?....perhaps not.  DC would allow a credit of "up-to" what DC would have charged for the same income.  So if NY is taxing at 6.2% and DC is taxing at 4%, DC would only allow a 4% credit.

 

But that really depends on what the total double-taxed portion of your income is,  because DC and NY have progressive rates:  NY is 6.21% to 8.82%, and DC is 4% to 8.5% over differing income ranges.....which is why the software is needed to puzzle it all out.

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