Live in Virginia, work in New York. Where do I pay taxes?

[scottwalker21]

I live in Virginia but last year, I started a new job with a company located in New York City. There is confusion over which state taxes should be withheld from my paycheck. My understanding is that because I am receiving income from NY, I am required to pay income taxes as a nonresident of NY. I would then receive a credit from Virginia for the NY state income taxes paid. Is that correct? Per our payroll provider, I should only be withholding Virginia income taxes and NY state unemployment insurance. No NY income taxes. Just for additional information.....while the company is based in NY, I primarily work in Virginia. I only work a few days a month in the NY office. Thanks for the help!

[AmyC]

Yes! NY law says nonresidents who receive New York-source income are required to file NY return. Example:  if Single and earned over $8,000 NY income. For more information, see: 2021 New York Instructions for Form IT-203 Nonresident and Part-Year Resident Income Tax Return.

You would also file VA return and they would give you a credit for the lesser of the state tax liabilities. 

Enter your NY return first, then the VA return for the computer to properly handle the credits.

[Hal_Al]

Q. My understanding is that because I am receiving income from NY, I am required to pay income taxes as a nonresident of NY. I would then receive a credit from Virginia for the NY state income taxes paid. Is that correct? 

A. Yes. That is the general rule.  If the NY tax is higher than what VA woulda taxed it, you may only receive a partial credit from VA. 

But more info is needed. You say "while the company is based in NY, I primarily work in Virginia. I only work a few days a month in the NY office".  What is the nature of your work? Are you working in VA for the convenience of the employer or for your own convenience?  That is, if your work could be done in the NY office, you are in VA for your own convenience and NY will tax all your income from that job.

Here's a link to New York's memorandum on its "convenience of the employer" tax doctrine regarding non-resident telecommuters: https://www.tax.ny.gov/pdf/memos/income/m06_5i.pdf