New York State Income Allocation.

[droids13]

I file a Non-Resident Tax Return for NEw York State. In 2020 I received Unemployment Compensation from NY State. In Turbotax it asks me to allocate the New york Source Portion. If I enter the amount of compensation I receive the program states I owe taxes. If i leave it black, as originally shown, I show a refund.

What is the correct entry?

[LenaH]

It depends. You have to enter the amount of your unemployment that was received as a nonresident resulting from your employment in New York State. If your unemployment compensation received was a benefit for working solely in New York State, then you would allocate your entire unemployment to your non-resident New York State tax return.

If the unemployment compensation received from New York State is based on wage or salary income earned partly in and partly out of New York State, you would have to determine the amount allocable to New York State in the same manner as the wage and salary income on which it is based. For example, if your wages were originally 50% allocated to your resident state and 50% allocated to New York, you would use that same allocation for your unemployment. 

If you did not pay enough taxes on your unemployment during the year, you may have to pay additional taxes on it when you complete your tax return. New York considers unemployment income as taxable income for residents and non-residents. 

I do not know what your resident state is, but you should be able to get a credit of taxes paid to New York State on your resident tax return. 

[droids13]

Lena,

Thank you for the reply.

In 2020 I was a full time resident of Florida, where we do not have a State Income Tax.

I worked for a company based in New York State and collected the umemployment for NY State while living in Florida.

I feel like I am entering the unemployment compensation twice.

In addition, I file a joint Federal with my spouse. My spouse did not work in NY State.

The Turbo Tax program is including her income on the NY State Return.

Do I still allocate my unemployment insurance or just leave the field as blank?

[ErnieS0]

Allocate all your unemployment benefits to New York. Unemployment compensation that is part of your federal adjusted gross income and derived or resulting from employment in New York State is taxable to a nonresident.

I‘m assuming when you say “company based in New York State” you mean you received unemployment as a result of previously working in or telecommuting for a company where your office was considered to be “New York.

It is not surprising you would owe NY tax on your employment because no state tax was withheld.

Your spouse’s income is included on the NY nonresident return. NY includes all income to compute a base tax rate and then calculates NY tax for part-year and nonresidents by prorating the total tax by the ratio of NY income to total income. This produces a higher tax rate, because the rate is based on your total income and not just your NY income.

[mike247]

Is this the same for the -$-10,200 Federal Unemployment exclusion? Turbo tax is asking how much of the exclusion is derived from NY sources?  NY is not excluding the 10,200 UI from taxable income?  I am a NJ resident that received unemployment as a result of income solely made/lost in NY. I entered the total unemployment amount as you indicated in your above answer. The next screen asks about the 10,200 exclusion.

[LinaJ2020]

That's correct.  New York State is currently decoupled from the federal American Rescue Plan Act of 2021. 

Since NY state tax calculation starts with Federal AGI which already includes the exclusion, the exclusion will be added back  on Form IT-558 New York State Adjustments.  

@mike247

[mike247]

This is not a great answer, honestly.  Since you are a TT rep, I need you to FOCUS on how TT is asking these questions on TT and NOT FOCUS on the question on the form since we are using TT and not filling out a manual form. TT asks this question in a sub par way on TT online.  There are many threads about this particular question and non of the experts are giving a straight answer.  Yes, NY is decoupled, the question is HOW CAN I GET THIS TO BE REPRESENTED ON THE FORM USING TT SINCE TT 1st ASKS where the UI is derived from---on 1st question on TT ( not the form) I put the FULL UI amount since the full UI came from NY. THE NEXT SCREEN ASKS how much of the $-10,200 ( negative number)  exclusion came from NY. THIS IS A CONFUSING WAY TO ASK THIS SINCE the exclusion derives from UI from NY yet the exclusion does not apply to NY. CAn you folks look at the TT program before you answer? Here, I think I should put ZERO, no?  IF this is the case, your answer YES previously is not correct or not clear. Yes could mean, yes, put the -10,200. Can you reread the thread please. Thank you.

If you are telling me it is correct that I have to enter $-10,200 then this will deduct 10,200 from the form it was just added to.  It seems that I would have to enter ZERO there, no?

[DMarkM1]

You are correct.  Zero of the Unemployment Income exclusion belongs on the NY tax return. Zero is the correct entry for the NY allocation of the 10,200 exclusion.  

[profman27]

What if the unemployment compensation from a New York based company is related to salary earned on tour outside of New York State.  None of the compensation was earned in New York State.  The taxpayer has a nonresident status with New York State.

How would you allocate the unemployment compensation? 

[ToddL99]

Allocate the unemployment benefits to your state of residence, where you resided when you received them.

If the employment (i.e. earnings") that qualified you for unemployment benefits were not subject to NY tax, then the unemployment benefits are not "NY-source" income and are not subject to NY tax.

(If those earnings were subject to NY tax, then NY would consider the unemployment benefits as NY-source income subject to NY tax).

@profman27

[Chris T2]

This is NOT correct answer. If you look at your IT-203 PAGE1-2, the Smart Worksheet is adding (IT-203,line 19 plus IT558) . It added $10200 back to the NYS Gross income. Therefore, you needed excluded $10200 from line 16-other income. The NYS Gross income line 19 should show the total excluding $10200. Line19A is taking the NYS income from the "SMART Worksheet" which included $10200.  

Simple math, line 31 NY Ajusted Gross income should show your income from NYS source.