Non-NY resident with a side gig LLC that has NY client - Do I file taxes in NY?

[Mh808state]

In addition to my full time job, I have side biz w/ a partner. We are both non-NYC residents but earn get paid by a client based in NYC. Last year I filed state taxes for NYC because I was under the impression that NY "income sources" require filing. I recently got a penalty bill for not prepaying my taxes in NYC (even though I did pay them in full when I filed). I was told that in NYC, if you are "self employed" you have to pre-pay your estimated taxes in the exact year that you earn income - not just when you filed your taxes the following year. Is this accurate??? This sounds crazy to me. And if so, how do you go about calculating the estimated taxes in order to pre-pay them? I also read in this community that you only have to pay the taxes in the state where you conduct the work, not where the money comes from. I'm very confused! Does anybody have any experience/insight on this scenario?

[tagteam]

I will page Champ @TomD8 for your question. Check back.