I moved states in 2020. Turbotax is combing 2 different state's income for NY and making me pay taxes, but I did specify what portion was NY. How do I fix this?

[3761561]

To clarify- I  went through and made sure only what was made in NY was listed for NY but when I review the document at the end, it is listing the full year's salary (for the 2 states I lived in) as what was made in NY and making me taxes for it (when I'm already paying that tax in a different state). not sure how to fix this?

[rjs · Accepted solution]

Any income that you earned from working in New York is subject to New York tax, even if you lived in a different state.

Look at the actual New York state tax form, not the summary in TurboTax. As a part-year resident of New York, you should be filing Form IT-203. The first page of Form IT-203 has two columns for income. The first column is federal amounts, and the second column is New York amounts. The federal amounts on lines 1 through 19 should be the same as on your federal tax return, and include all your income. The New York column should show only the income that you earned while you were either living or working in New York.

If your New York income (while either living or working in New York) is less than your federal income, you are not paying New York tax on the full federal amount. The way New York calculates the tax, it first calculates tax on your entire federal income, after New York adjustments. But then it applies an "income percentage" that is your New York income as a percentage of your total income. That's how it adjusts the tax based on how much of your income is taxable by New York. You can see this on page 3 of Form IT-203, on lines 45 and 46.

If you have further questions, please say what the other state is that you lived in, and what state you worked in while living in each state.

[3761561]

Thank you so much for that clarification! I appreciate it. 

[rebazambrano]

Hi, I have the same problem except for I did not live in NY and I made sure it was clear in the forms.

I lived in NJ while worked in NY. I had NY UC. My husband lived and worked in NJ and got NJ UC. Now New York is taxing us for ALL that including my husband's income and UC from other state and we seem to own a lot of money to NY. PLEASE ADVICE

[DanielV01]

@rebazambrano You do have an option.  While NY is not taxing all of your income, they are factoring in all of the income to determine how much they will tax, and they are using New York rules, which includes taxing unemployment income, which is not taxed in New Jersey.  

If you file as Married Filing Jointly in New York, New York will pretend that all of your combined income is taxable in New York and then prorate that tax amount to the amount of income actually earned in New York.  If your husband has substantial income, this could put you into a higher tax bracket on his income, even though that income is not actually taxed in New York.  And, his unemployment is also getting factored into the equation, even though that income is not even taxed in New Jersey, nor 10,200 of it is taxed at the Federal level.

So the option you may have that will produce a better result is to file as Married Filing Separately in New York.  Although normally New York requires you to use the same status as your Federal return, this is a situation that is an exception:  when one spouse has New York income and the other does not.  If doing this results in lower New York tax, use that status.  

But understand that your unemployment is going to get taxed in New York regardless.  You may try to enter in the total amount of your New York income getting taxed and the amount of that tax in the Taxes paid to another state on your New Jersey return, and that may reduce your New Jersey tax further.

[rebazambrano]

Thank you Daniel.

I am trying to do that but I do not see an option in the system to change our status for the New York return. Any advice?

[DanielV01]

@rebazambrano  Have you tried to delete the New York return and start over?  The option to file is at the very beginning of the state interview.