Lived in NYC for 10 months and NC for two months working remotely the whole time- W2 says NC

[hellotax1111]

Hello, 

This past year I lived in NY for 10 months and then worked remotely in NC for about 2 months. My W2, still says NC and I do not want to change it at this time. I'm using Turbotax online. 

1. I am thinking this means that I would file as a part resident of NY and part resident of NY is that right? 

2. Are there any implications if I keep my W2 as my NC address?

Thank you

[KeshaH]

Yes, you'd file a part-year return for both states and you can keep your NC address on the returns. If you worked remotely for the same NY based employer while in NC, all of your income may be taxable to NY even during your nonresident period.

[hellotax1111]

Thank you

1. I am not sure what you mean by NY based employer. Can I clarify if my employer is NY based with the below info?

The employer has offices in multiple states. It does not have an office in NC but I was working only from NC before and I suppose that means they have a tax location in NC even if not an office because there are other NC remote employees in NC also. 

Now that I moved to NYC, I work from NYC but when I go back to NC I work from NC. 

2.So to summarize, is the below correct?

-I'd file as part year resident for NY and part year resident, correct?  Turbotax is recommending that I fill out a full year NY resident form.  I'm not sure why. Would you know why that is since I only worked remotely for 10 months in NYC?

-Does it matter that my permanent place of abode is NYC but I go back to NC to visit and work remotely in terms of whether I am considered a part time or full time resident of NY for tax purposes?

-Regardless of if I file as a full year or part year resident of NYC, I'd get a credit from NC for any NC taxes. I paid for the time I was in NYC, correct?

-For NY am I taxed on only the NY income in 2024 (I lived there 10 months), correct?

-For NY am I taxed on only the NC income in 2024 (I lived there 2 months) correct?

3.

-I am not planning to change my W2 address and will keep my work address as NC for my W2 in the future because I don't want to change it.  Is that ok and what are the implications?

-If I live in NY for the full year and my W2 has the NC address (if I don't change it at work) still does that affect my taxes and what are the implications?

4. For the part year residency of NC and part year residency of NY, Turbotax asks start date and end date of residency, if I go and come multiple times, do I just find out how many days I was in that state and make up the start date and end date to match the total number of days? I don't know I can enter multiple start and end dates in Turbotax. 

5. Turbotax is also asking me to allocate interests, dividends and any Capital gains earned by state.

-Would that be allocated by the same ratio I lived in each state (same as the W2, 10 months in NYC and 8 months in NC). 

-I don't remember where I was living when I earned those interest, dividends and capital gains because those are from many different stocks and throughout the year I think. In that case can I just allocate it based on the same ratio time I lived in each state? 

-Do I have to allocate the interest, dividends and Capital gains by state? Can I just choose a state or the lower tax income state to allocate 100% to?

6. Does Turbotax include the city tax for living in NYC? If not, how is that typically paid?

[KeshaH]

Got it, so if your employer isn't NY-based and you weren't assigned to a NY office while working remotely, only the income you earned while in NY would be taxed to NY. You'd only get a credit in NYC for the taxes you paid to NC if you had to report the same income on both returns, which wouldn't be the case for you. Instead, you'll allocate the income that you earned while in NC to NC and the income that you earned in NY to NY. Same of NYC. 

Keeping your work address in NC means that your employer will likely continue to withhold NC tax even though you aren't living there (unless you can claim exempt from NC tax withholding). 

You'd have to file a NC nonresident return and allocate $0 of income so that you can get a full refund of those taxes. You'd file a resident return for New York and have to pay the tax on the return. It would be best to make estimated payments to avoid a balance due for New York.

[hellotax1111]

Thank you 

Can I please clarify for my situation last year in 2024 which of the following you are recommend I file and how much of the income to allocate to each state when I file in order to get the tax credit that I paid to NC on the W2 (since my W2 had NC for 2024 and I only lived there for 2 months in 2024)? I'm trying to file by today to save on the filing increase. 

As a reminder in 2024,  my W2 witheld NC taxes since my address was NC for all of 2024 and I plan to keep it that. way for next year also. So my W2 has my NC address, my company has a tax address in both NY and NC and I lived 10 months in NYC and 2 months in NC last year working remotely but I am renting/living in NYC at the moment and just going back to NC for visiting.  

I saw there is something about NY convenience of employer rule not sure if that has anything to do with this. chrome-extension://efaidnbmnnnibpcajpcglclefindmkaj/https://www.tax.ny.gov/pdf/memos/income/m06_5i.pdf

-a part year NY return and a nonresident NC return? 

a part year NY return and a part resident NC return? allocate part to NY and part to NC

-a part year NYC return, part year resident NC return and a nonresident NC return? 

-full year NYC resident turn and nonresident NC return? allocate my income fully to nyc and $0 to NC

My token number is 1297265. Is it correct at the moment?

[MaryK4]

You will need to file a part year NY return and a part resident NC return.  You must inform your employer where you are working- the physical location.  They have withholding obligations. @hellotax1111