Multi-State Apportionment

[ApportionmentHelp]

Hi,

I am having trouble filing my state taxes. I worked remotely for my employer, based in CT, for the entire duration of 2023. I lived in PA for the first ~4 months of the year, and moved to NYC for the last 8 months. My W2 only has information regarding CT and NYC. It does not have information for PA. I'm trying to appropriately divide the income within TurboTax, but the forms are confusing, and lack information on how to best calculate the appropriate apportionment. Can someone please help me decipher this?

[DMarkM1]

You will be filing a part-year return for PA and a part-year return for NY.  Also, according to the CT Department of Revenue, "Wages of a nonresident are not subject to Connecticut income tax withholding if the wages are paid for services performed entirely outside of Connecticut."  

So unless you physically worked in CT there will be no tax due there.  You will need to file a non-resident return with CT to claim a refund of taxes withheld for CT. 

Ultimately you will get a refund from CT but have to pay PA since nothing was withheld there.  Depending on the level of NY withholding you should be good there. 

To generate the correct forms:

1. In the "My Info" section edit your information
2. Indicate you lived in NY on 31 December
3. Yes you lived in another state (PA)
4. Enter the date you moved to NY
5. Continue (This generates the part-year returns)
6. Still in "My Info" scroll down to "Other State Income"
7. Answer "Yes" you earned income in another state 
8. Select CT
9. Continue (This generates the CT non-resident return)
10. In the "Wages & Income" section now
11. Enter your forms W2
12. Add a line in the state area (Boxes 15-17) with PA and the employer's federal ID number with no spaces/dashes, the W2 box 1 amount in box 16 and a zero in box 17
13. Continue as needed to complete the "Income" entries
14. Next work the CT state interview
15. Allocate zero (0) income to CT throughout the interview
16. The result should be all taxes withheld there show as a refund
17. Next work your PA return
18. Allocate 1/3 (4 of 12 months) of the wages to PA when asked
19. Allocate any other income sources as needed if received while living in PA
20. Finally complete the NY return
21. Allocate 2/3 (8 of 12 months) of the wages to NY when asked
22. Allocate any other income sources as needed if received while living in NY

[ApportionmentHelp]

Thank you for your insight on this. I keep seeing conflicting information, however, due to the convenience of the employer rule:

https://ttlc.intuit.com/turbotax-support/en-us/help-article/form-w-2/employer-withhol[product key re...

What you referenced before:

https://portal.ct.gov/DRS/Withholding-Taxes/Nonresidents-who-work-in-Connecticut

Seems to only apply to employers withholding money for taxes.

So, I think I should apply the credit to my NY taxes, right?

https://ttlc.intuit.com/community/state-taxes/discussion/lived-in-ny-and-worked-100-remotely-from-ou...

[AmyC]

I think I see your disconnect. You  file a credit form when you have a tax liability for another state,  not for withholdings.

When you enter the  W2 into the program, the federal information should match, the state information is where you explain what really happened.

Part year for PA should have your dates of residency and the income earned while living in PA. You can look at paystubs or the W2 may have the correct information. Enter the correct PA information for wages and tax withheld.

The CT/NY issue is bothering you. There are two ways this can go.

1. You file CT and say none of the wages were taxable and get back the full amount. There is no NY credit since there is no CT tax liability. 

2. You file CT and have an actual tax liability then you would file a credit on your NY return for the taxes paid to CT.

Unless you are part owner of the business, you would not have CT source income and would have no CT income tax liability unless you have other income from CT, like a pension distribution, Powerball, etc. See CT source income for nonresidents