Incorrect NY State Tax Calculation

[Robert B D]

I was trying to do NYS tax, but I found the calculation wrong for line 39. It applied the flat tax rate of my tax bucket to line 38 rather than doing the calculation found on page 57 of IT-201 instruction.

I also found the same error in the enhanced IT-201 found on ny.gov.

I.e. if my taxable income is 300k, it shows NYS tax to be 300k*6,85%=20550 rather than (300k-215400)*6.85%+13288=19083.

Could someone confirm this for me? Thank you

[leid]

I found a similar issue. My NY State taxable income is $110,830. According to the tax table, the calculation should be:

$2093 + ($110830 - 43000) * 6.09% = $6224

However, TurboTax gave me the tax amount of $6,426. That was $202 more than it should be.

What happen with the software ( I use the Premier version)?

[leid · Accepted solution]

Yes, I finally found that TurboTax's calculation was right, and I was wrong.

I missed the following on the NYS document:

"If your New York AGI amount on Form IT-201, line 33, is more than $107,650, see
pages 58, 59, and 60 to compute your New York State tax."

My mistake was that I just used the Taxable amount to figure out the tax. But the rule ask to consider the NYS AGI also, and that would add the $202 to the tax amount I have to pay.

[BillM223]

@Robert B D

Did leid's answer make sense to you? Do you agree that TurboTax is calculating the NYS tax correctly?

@leid - thanks for coming back and telling us!

[Ptaxhof]

It still does not make sense to me.

Anyway I look at it I’m getting taxed at the flat rate.

[kappynen]

Just ran into the same. It's effectively a phase-out of the New York State subtractions only for incomes above the threshold ($107.7k).

[Nina Lehman]

I agree

[nid]

It still does not make sense. 

If the taxable income is 250K, the tax should be 12926+6.5%*(250K-215400), but turbotax is calculating 6.5%*250K. 

Could you please elaborate why is there this difference?

[kappynen]

Not quite. Refer to "Tax computation worksheet 2" in the IT-201 instructions, page 46. Effectively, New York State phases in a flat tax at higher income brackets.

[nid]

May be but mine is IT-203. A part time tax resident

[BrittanyS]

The IT-203 still uses the tax computation worksheet 2 to calculate the tax owed for higher income brackets.  See the worksheet below to determine how IT-203 is calculated:

Additional instructions can be found at:

Instructions from Form IT-203

@nid