New York State filing for military

[Username999]

Military, active duty, state of legal residence and domicile and non-resident of NY https://www.tax.ny.gov/pit/file/military_page.htm as group A. Military pay is exempt from NY state tax and only listed in boxes 15 and 16 on W2. I did not live in NY for the entire year and duty station is another state. Turbo Tax automatically using nonresident Form IT-203.

First. Under the Turbo Tax Income Allocation page "Enter the amount of federal income that was derived from New York sources. If none, enter zero." The boxes list "Federal Income" and boxes for "New York source portion" for these categories "interest income, dividend income, capital gains and losses". If each one is $1000 in the federal column, do I enter $1000 in the NY source portion boxes? Or is it "0" because they are not New York sources? I noticed that If I enter $1000 in NY source portion boxes, the NY refund is $0. Do I need to file at all if refund is $0? I am not claiming anything else. 

Second. On the "Allocate wages to New York" page. Do I use "don't allocate this employer" to make W2 wages exempt?

Third. Do I need to file a second state return for the location of my current duty assignment? They do tax income.  

[AmyC]

1. Enter zeroes since you qualify as a nonresident. NY is your HOR, but you group A exception for having military pay nontaxable and file a Nonresident return, according to NY here. According to NY for nonresidents, you don't need to file. See here.

2. NY not needed, you can delete the form.

3. Yes, you must be a resident of another state since that is required to be exempt in group A for NY.