Living/working remotely in NYC for CT company - how do I arrange my taxes (2023)?

[cwoolfrey]

Hi!

I'm about to start a new job where I'll be primarily remote, going occasionally to an office in Connecticut. I live and work remotely from New York City.

As you can see from the screenshot, my company has me set up as "Work state: Connecticut" and "Home state: New York."

Do I need to do anything on starting at the company to avoid being double taxed on my 2023 return? I usually don't take any withholdings whatsoever. Just want to make sure I am set up correctly going into the new job!

Thanks!

[HopeS]

It depends. You will have to file a resident NYS return and all of your wages are taxed by New York. You will also have to file a nonresident Connecticut return because state taxes be withheld since you will be working in CT and I assumed the new company is based there. For your payroll taxes make sure they are withholding all your wages for NYS so you won't be under-reporting NY taxes

 However, where you worked (and why you telecommuted, if you did) will determine which state the income is actually sourced. 

Connecticut uses the Convenience of the Employer test in determining source income. Generally, in a state that applies this test, wages earned by a nonresident are allocated to the employer’s location unless the nonresident works from an out-of-state location due to the necessity of the employer rather than the convenience of the employee. 

If you telecommuted for your convenience, then your wages would be taxable in Connecticut. However, in that case, you will not be double-taxed because New York will give you a credit for taxes paid to another state. 

If you telecommuted for the convenience of the employer, your wages are not taxable in Connecticut. However, you would still have to file a Connecticut return to get a refund of the state tax paid. 

I suggest you speak with your HR and Payroll Department directly to make sure your withholding taxes are done correctly.

See additional helpful information below for your 2023 Tax Preparation:

Live and work in different States

@cwoolfrey