Moving out of NYC/NYS to WA in mid Feb 2025 with RSUs

[madmanc20]

Son is moving from NYC/NYS to WA on 2/15/25 and working for the same company. Company has employees and offices in both regions. They will process his pay as NY resident before the move and WA resident after the move. WA has no income tax (but are creeping along with long term health care tax (Son is skipping after return since purchased an LTC satisfying WA state law) and > $250k CG taxes)

He has RSUs vesting over 4 year linearly each quarter. RSUs are granted every quarter (first 4 quarters delayed until 5th quarter grant date) We are already in ~8th quarter now.

All prior grants paid NYS/NYC taxes since NYS/NYC resident. Next quarter of RSU grant occurs on ~2/18/25. We are confirming with HR they will process NYS/NYC taxes for majority of the RSU grant $s since NYS/NYC residency % of this vesting period is nearly 100%.

RSU grants beyond the 2/18/25 block don't have to pay NYS/NYC taxes.

He will have a few business trips to NYS/NYC rest of the year for 1+ week per trip.  He doesn't have to pay NYS/NYC taxes during these visiting periods.

Is my understanding basically correct? Trying to be clear and thorough since NY+CA are notorious for collecting non-resident tax allocations.

Also just FYI, HR is paying far higher taxes to NYS than NYS tax rate resulting in a big loan to NYS until tax refund. I guess possession is 9/10th of the law and have some potential risks of not getting it back. Refund amount would be in the few $10ks.

[TomD8]

@madmanc20 --

"He will have a few business trips to NYS/NYC rest of the year for 1+ week per trip.  He doesn't have to pay NYS/NYC taxes during these visiting periods."

That is not correct.  NYS (but not NYC) can tax him as a non-resident on any income he earns from work he physically performs within NYS.  He will have to keep track of the number of days he works in NYS so that he can correctly apportion his income at year's end.  He will have to file a non-resident NYS tax return to report that income.

https://www.tax.ny.gov/pit/file/nonresident-faqs.htm#:~:text=As%20a%20resident%2C%20you%20pay,proper....

NYC income tax applies only to NYC residents.

[madmanc20]

Thanks on the business trip taxes. I think this is commonly called jock tax.

This gets messy with dyanmic income stream. For example, raises, bonues, and RSU vesting window. I'd imagine would require proper prorating for all income components. And NYS can easily trigger an audit to create a miserable process even if all the prorating is proper.

And depends how far one wants to go to claw non-resident earnings. What about dividends from NYS sources. Say a mutual fund with some NYS sources.

[madmanc20]

Son's company has locations all over US. HQ is in Denver with offices in NYS and WA. Each office pays local state employees as local. My son will be a WA employee.

It seems awfully aggressive to tax any business trips to NYS/NYC for a company thats not located in NY. Anyone taking a short business trip would then have to do non-resident tax return. Thats a ton of people and I'd imagine most don't file. In my son's case, company has a location in NYS/NYC but he doesn't work for them. He works for the WA office.