Military pay on it203

[user17736252621]

If i am a Pennsylvania resident but a member of the NY national guard. My w-2 from the guard says Pennsylvania in the state tax section. In filling out the IT203 the income is not showing in the new york income(column B) of the IT203 which is correct but why is it subtracted on the Federal side as a modification S-119 when it was a Pennsylvania W-2

[DaveF1006]

It depends. Even though your W-2 is for Pennsylvania and you are a PA resident, New York uses a "total-income" method to calculate your tax rate. Here is why that subtraction (S-119) is happening on the "Federal" side of the New York form.

New York calculates a nonresident's tax by first determining what your tax would be if you were a full-year New York resident.

1. Column A (Federal Amount): This column represents your total income from all sources (the "Federal" side). New York starts with your Federal Adjusted Gross Income (FAGI). 
2. Column B (New York State Amount): This column is where you only list income actually earned in New York.

As you noted, your Guard pay is correctly excluded from Column B because you are a nonresident. The S-119 modification (under NY Tax Law Section 612(c)(8-a)) specifically allows military pay to be subtracted from New York's calculation. The modification ensures your military pay is ignored entirely by New York—not just for what you owe (Column B), but also for the math used to determine your tax bracket (Column A).

Without it, the pay would be included in your New York income, which wouldn't be in your best interest financially.