New York state charging me for income earned outside New York state (2021 tax return)

[prannerta100]

I lived in New York state till the end of June 2021 (less than 184 days total) , and then moved away to Washington state and started my next job in the end of September (I was unemployed for roughly 3 months). In New York let us say I made 20000 with an employer based in New York whereas I made 30000 with an employer in Washington state in 2021. Ideally New York should only tax me for the income I earned in New York (20000), but based on my Turbo Tax filing it seems New York is going to charge me for all the 50000 I earned (30000 in WA and 20000 in NY). Please let me know if I am doing something wrong here. 

PS: Turbo Tax had me fill the IT 203 form (part year resident) and WA does not have any state income tax.

Is it normal for NY to tax me for the income I earned in WA after I permanently moved out of NY, or NY is not giving me any tax relief from its NY state income tax just because WA does not charge any income tax?

https://drive.google.com/file/d/1vAacG0gM4mZEMy-cIoZgrAydEfK1uyQ1/view?usp=sharing

[MayaD]

NY calculates what your New York tax would have been if you earned everything in NY, but then prorate that tax based on how much of your income was earned while a NY resident. 

As a part-year resident, you pay New York state tax on all income you received during the part of the tax year you were a resident of New York, plus on income from New York sources while you were a nonresident. 

[momthechauffer]

I am in the exact situation, I am trying to do my daughter's taxes.  She moved out of NY on 5/31 (151 days).  Moved to Texas, got a job (actually TWO) but I think it stinks that the money she earned in Texas is figured and the standard deduction is taken out of that amount.  I don't really understand what that answer was given either.  They will tax you on what NYS THINKS you should have earned here?  And then that pro-rated amount for her NY earnings looks like they're taxed again.  Way to go NY.  Plus the earnings in TX are NOT NY sourced, she worked and lived in TX, has nothing to do with NY.  But NY considers it as NY income as a non-resident. It's not like she's living in TX, working from home for her NY employer earning NY money in TX. She worked in NY, earned NY money, moved to TX and earned TX money, none of it is NY based.  At all.  I don't get it.

Another problem I have is when I uploaded her Texas W2's it actually has "TX" marked off in box 15, meanwhile when I print out her tax returns/worksheets etc/ it shows "NY" as state.  Really? 

I agree with you....why is the out-of-state earnings figured into the NYS side?  The out-of-state earnings were higher than NY. It makes no sense.  Can't wait to do her next year's taxes, at least she won't have to deal with NYS/NYC nonsense anymore.

[ThomasM125]

While it is technically true that New York taxes all income earned, including income earned in Texas here, the tax calculated using that income is then reduced based on the percentage of income earned out of state. So, the income earned in Texas is not necessarily ending up being included in your tax for New York.

It is also true that New York will consider telecommuting income earned from New York sources while working in another state as income earned in New York, but that is not true of income earned from Texas sources while being a resident of Texas.

@momthechauffer

[DannyBoyCA]

I was charged $1000 in state tax from NY, for earning $17000, after moving from CA to NY in September  2021. Isn’t that a bit high? Seems NY is basing it on the whole year including CA earnings. My TurboTax is already filed. What should I do about this? Is there a phone number I can call to consult?

[ThomasM125]

New York does tax all income you earn in and out of the state, but they reduce the tax by a percentage based on the income you earn out of state. So, you do get a break on income earned out of state. The $1,000 in taxes you paid is about 6% of the income of $17,000, and that seems normal for a state income tax.

@DannyBoyCA

[thlanthorn]

I see that NYState used a factor to decide how to tax my NYState income, BUT they used a factor of 0.3... when my NYState-based income was only 0.15...  of my total earnings.  This can't be correct.

[momthechauffer]

@ThomasM125 

Thank you for your reply.  I noticed I had a typo (which I just fixed) in my post.  I was upset that money earned in TX was being used to take the NY Standard Deduction.  The amount in column A which is from the Federal form has all income earned in both states.  Then in the other column is NY earnings.  Meanwhile the deduction is being taken from the Federal side, which already has the NY earnings factored in.

I have a meeting with my boss who is an accountant also and I'm hoping she can answer this also.  Because depending on how I answer the questions in Turbo Tax, my daughter's NYS refund goes from $92 to all of if back (which I KNOW isn't right) to $482 (which MIGHT be correct).  I'm good with numbers but sometimes the questions make no sense.  One of them:  The date you moved into or out of NYS.  The answer could mean either it's the date you moved OUT of or IN to the state.  I literally had to walk away from this for a day.  But I'm hoping the answers on this thread helps.  Thank you.

[thlanthorn]

I can see on the NY State worksheets, a bogus number of $15K for NY taxable interest has appeared!  

This makes it appear i made a larger %age of income because of NY State than I truly did.  When I zero out that entry then the % NY-based income, and the amount I owe, comes out correctly.  BUT, I have no idea where that bogus value came from and whether zero-ing it out was the right thing to do.

   Tom 

[AmyC]

As long as the correct NY income is now showing, all is well. When you go through the NY program, it asks about the various incomes and what amount is NY. As a nonresident, there is a screen that says New York Income Allocation. It is after the w2 part so you might have missed the screen with the interest. Using bogus sounds like it wasn't really your income. In that case, something is really odd and definitely needed eliminating.

@thlanthorn