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I moved from NY to CA, my W2 for NY state shows taxable income as my full year income. I think this is a mistake, want to confirm. I believe I should pay NY tax only for partial income till I was NY resident. Can someone tell me whether I am thinking corr

 
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1 Reply
ToddL
New Member

I moved from NY to CA, my W2 for NY state shows taxable income as my full year income. I think this is a mistake, want to confirm. I believe I should pay NY tax only for partial income till I was NY resident. Can someone tell me whether I am thinking corr

Yes, what you are seeing is accurate, but NYS (or NYC) is not taxing the income you made after you became a resident of CA.

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.

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. 

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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