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timk78
Level 2

I moved from New York to Virginia 2 years ago. I recently received a backpay from NY with NY State taxes deducted when I now live in VA. do I need to pay VA instead?

I haven't worked in NY since I moved to Virginia.  Do I need to file new york to get the money back and account the backpayment to Virginia when I file even though it was earned originally when I lived in NY?

6 Replies
Critter-3
Level 15

I moved from New York to Virginia 2 years ago. I recently received a backpay from NY with NY State taxes deducted when I now live in VA. do I need to pay VA instead?

VA will tax all income received from all sources period.  So what you will need to do is file a non resident NY return  and a resident VA return where they will give you credit for any NY taxes you owe.  Complete the returns in that order so the program completes the credit correctly ... NY FIRST then VA.

Hal_Al
Level 15

I moved from New York to Virginia 2 years ago. I recently received a backpay from NY with NY State taxes deducted when I now live in VA. do I need to pay VA instead?

It might be worth a call to the NY Department of Taxation and Finance to see of you are entitled to a refund (probably not).

 

It's, most likely,  a double whammy.  NY probably considers it taxable by NY because it was earned there.  VA considers it taxable because it was received while you were a VA resident.  But VA will give you a credit, or partial credit, for the net tax you pay to NY.  So, there will actually be little or no double taxation.  But you will probably pay more state tax because NY has a higher rate. 

timk78
Level 2

I moved from New York to Virginia 2 years ago. I recently received a backpay from NY with NY State taxes deducted when I now live in VA. do I need to pay VA instead?

Thanks you both for the great information!  

timk78
Level 2

I moved from New York to Virginia 2 years ago. I recently received a backpay from NY with NY State taxes deducted when I now live in VA. do I need to pay VA instead?

when I file for my non-resident new york state taxes, do I need to report only the paycheck/income where new york state taxes were deducted, or do I report all income received in 2021, for even those paychecks where I earn in Virginia, and Virginia deducts state taxes?

DaveF1006
Employee Tax Expert

I moved from New York to Virginia 2 years ago. I recently received a backpay from NY with NY State taxes deducted when I now live in VA. do I need to pay VA instead?

Yes, all the income that you reported on your federal return will flow to your NY non-resident return and VA return if you are using Turbo Tax. When you prepare your NY return, you will be asked to allocate your NY source income from the other income reported. Once you finish your NY state return, you will be given a credit on your VA return for the taxes paid to NY.

 

Make sure you prepare your NY non-resident return first to ensure that you are given credit for your taxes paid to NY. 

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Opus 17
Level 15

I moved from New York to Virginia 2 years ago. I recently received a backpay from NY with NY State taxes deducted when I now live in VA. do I need to pay VA instead?


@timk78 wrote:

when I file for my non-resident new york state taxes, do I need to report only the paycheck/income where new york state taxes were deducted, or do I report all income received in 2021, for even those paychecks where I earn in Virginia, and Virginia deducts state taxes?


Your NY non-resident tax return only reports and pays tax on NY-source income paid to you in 2021.  However, you will probably be asked by Turbotax to manually allocate your income.  (You will be asked to allocate all your income, including bank interest and investments as well.  It's a bit annoying, but nothing would be NY source income except this back pay.)

 

Separately, I'm not entirely convinced this is NY-source income.  However, because of the VA tax credit for out of state taxes paid, and the fact that NY's income tax rate is only 0.75% higher than VA's rate (for most taxpayers) it's probably not worth it to make a fight over it.  

*Answers are correct to the best of my ability at the time of posting but do not constitute legal or tax advice.*
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