Nonresident New York State Taxes - Only a portion of income

[LAH_2025]

Hello,

A small portion of my income was earned from a New York State source. I reside in Montana and work predominantly in Montana, so I'm a nonresident in NY. I worked a remote, paid internship for a company based out of New York City. When I go to file a nonresident state return with NY, TurboTax lists my entire federal income and shows that I owe NY state money.

On my NY W-2, it shows state taxes taken by both New York and Montana. It's a very small amount as it was only a 3-month internship, part time hours with relatively low hourly pay. I've never filed a nonresident tax return before, and do not understand why TurboTax would list my entire annual federal adjusted gross income for the nonresident NY tax return, when only roughly 10% was earned from a New York source. Could someone please give me guidance with this issue?

Thanks in advance!

[MindyB]

Yes, when filing a non-resident New York returns, you will need to allocate the NY wages.  Prepare the NY return first.  Then, prepare Montana second.  Montana will tax you on all of your income, but you will get a credit since you paid tax to NY.

In TurboTax Online, navigate to States > New York > continue until you reach New York Income Allocation, answer No. Then, you can allocate the appropriate amount to NY.

See this article on the topic: How to enter New York State income as a nonresident in TurboTax