Moved to Texas permanently from New York - how do I prove to NYS taxation dept that I do not owe taxes to them?

[magimagss]

I work for a company that has offices in multiple states - NY, IL, CA, TX, FL etc.

In 2022 I worked for their NY office Jan 1 - March 31st. On April 1st I made an official transfer to Texas - I purchased a home and got permission from my manager to work remotely from that home full time. HR systems changed my employee profile from 'NY worker' to 'Texas remote worker' as of April 1st and my badge access to the NY office was revoked. Also, HR stopped deducting my NY state taxes as of April 1st. I continued working remotely from Texas for the rest of the year and not worked any day in our NY office after I moved to Texas.  I support sales teams that are located in multiple states so it's impossible to state which state I do work for. 

I received a single W2 from my employer - the W2 is generated in Illinois (that's where our payroll dept is) and has Illinois address of the employer but the employer has license to do business in 40 states (it's a bank).

On TurboTax, I was asked to "allocate my NY State earnings".  So I took the number of days I worked for the NY office (Jan-March: 90 days), divided by 365 = 0.25 and multiplied this by annual earnings to come up with the amount I earned while working for the NY office. Will this trigger an audit from NY tax dept? 

I am not linked to any Texas office on the HR system although there are two offices in Texas - in Dallas and in Houston and I do support the teams that are based there.

Do I need to be linked to any of these offices in Texas to prove to NY that I am not working in NY state anymore? Or will my explanation that I gave above be sufficient for the NY auditors?

[SundayInSalem]

New York is very aggressive about taxing remote workers so it’s possible you will either receive an audit notice or a pre-audit notice. The pre-audit asks you to fill out a form asking how many days you spent working inside and outside of New York.

Your fact pattern seems to demonstrate that you:

1. Permanently abandoned your New York residency by buying a home in Texas (and presumably selling a home in New York or ending a lease), and
2. Became a Texas employee by having your company change your status to “Texas remote worker” and having your NY access credentials revoked.

You do not have to link to a Texas office.

Your moves should be sufficient. However, lawyers who specialize in residency audits note they have lost court cases where the facts demonstrate the taxpayer is no longer a NY resident and/or no longer a NY worker.

However, it seems you have done what you can. If you do get audited, you may want to consult a law firm.

Two resources that are helpful:

• "What to Expect in a Residency Audit" by attorneys Hudgson Russ
• "New York Tax Treatment of Nonresidents and Part-Year Residents Application of the Convenience of th... by the NYS Department of Taxation and Finance

[magimagss]

Thank you so much for replying.

You mentioned people lost court cases even though facts demonstrated that a person is no longer NY resident nor NY worker - does it mean that if I lose in court I will owe taxes to NYS not only for 2022 (when I moved) but indefinitely to the future for as long as I work for this employer?

And the second question regarding the "Convenience of the employer test" - I do not believe this rule would apply to me because the memorandum states that it "addresses situations where a nonresident or part-year resident employee whose assigned or primary work location is in New York State performs services for an employer at that location and at a home office located outside of New York State."  - my primary work location used to be in New York state only up until March 31st, 2022 but not after April 1st, so this rule should not be applicable to me from April 1st onwards, correct? 

[Hal_Al]

You're looking for a definitive answer and I don't think anyone here can provide that.  I think that @SundayInSalem  answer is excellent: you're on solid ground and should file that way.  But don't be surprised if you hear from NY. Don't worry about that until it happens, but be prepared.  The fact that your employer stopped NY withholding is a good sign. 

That said, reading between the lines, it appears that you did move to TX for your convenience.  The fact that the employer has offices in TX, that you support, helps your case.  But the fact that you don't work at those locations hurts. If you physically go to those offices, on occasion,  would help. But if your "support" is all from home and could be done out of NY would hurt.