New York Taxing out of state wages (2022 Tax Return)

[nid]

I am a part year resident of New York City (moved in 05/22) and was previously in residing in MA. I am owed a state income tax refund in MA. When I file my state tax return for New York, it taxes my entire income for the year and not just the income emanating from New York. My MA income had nothing to do with New York. 

I understand that New York reduces the tax amount based on what percentage of the income was earned within New York. However my question is should I also fill in the tax I paid in MA (Witheld tax - refund) to be taken into account while filing New York return? 

For eg:

1) If my MA income was $400; my employer in MA withheld $100 and I am owed $20 refund, I still paid  $80 tax on my MA income of $400. 

2) My New York income is $1000, but New York is taxing me on $1400 and reducing the tax by 28% to account for out of New York income.

3) Can I still ask for tax credits for $80 I paid as taxes in MA, considering that New York is taxing my entire income?

[ErnieS0]

No. You cannot claim a credit for tax paid to Massachusetts on your New York return, even though it seems like NY is double taxing your income.

It is not. NY is including your income to determine your base tax rate. You are only paying tax on the NY income percentage of the base tax.

For example, if you earned $100,000 everywhere and had $20,000 in total deductions, then your NY base income would be $80,000. If the NY tax on $80,000 is $x and you earned $50,000 in NY then your part-year/non-resident tax would be 50% ($50k/$100k) of $x.

New York requires employers to report in Box 16 (state wages), income earned everywhere so if you worked for the same employer all year, on your NY return you will have to allocate the amount earned from January to October either by days or by percentage.

The New York section will ask you whether all your income was earned in NY. 

New York requires employers to report in Box 16 the total amount earned everywhere (not just in NY). That's just the way they do it.

Make your adjustment in the New York section.

The New York section will ask you whether all your income was earned in NY.

1. On New York Income Allocation, say No to Were all of your wages and/or your self-employment income earned in New York State?
2. Tape Edit on "Your W-2 on Your Form W-2 Summary"
3. Choose Allocate by Number or Days or Allocate by Percentage on Allocate Wages to New York (percentage is usually the easier calculation)