NY allocation of wages

[LayneNP]

I am a nonresident of New York.  When asking for allocation of wages, it only allows you to choose between allocating by percentage or allocating by number of days.  This makes sense if you are salary but I am paid hourly (and in fact only worked 2 days, or 26.5 hours in NY).  My employer gave me an EXACT dollar amount for my wages in New York.    Is there a way to just allocate an exact dollar amount? 

[JosephF8]

Unfortunately, no. The easiest way in your case would be to allocate by percentage.

Divide your NY earnings by the total earnings for this employer. Enter the percentage.

Then continue through the rest of NY. At the end of the interview it will show total NY income. Make sure it is accurate.

[steveb257]

I have a similar issue and was hoping for some advice. Nonresident NY filer but traveled to NY for working days. My NY W2 has BOX 16 with federal amount wages which is fine and in BOX 14 I have specific NY wages amount. However, when I use the days allocation method for the days I worked the amount allocated for NY wages does not match what is in BOX 14, it is less! Can I chose either not to allocate for this employer or just use the BOX 14 amount and say it was 100% of NY wages??

Additionally if filing a IT203 are you required to file a IT203B? The instructions indicate the below and I am confused.

Failure to complete Schedule A of Form IT-203-B (and
Form IT-203-F, if applicable) and submit it with your
return will delay the processing of your return and could
result in penalties and interest being charged.

[JosephF8]

NY will be looking for the amount in box 16 to be reported and allocated.

Since you do have a specified amount for NY actual wages (in box 14) it will be easier and more accurate to allocate by percentage.

Schedule A of form IT-203-B is the form used for this allocation.

[LayneNP]

@JosephF8  I found the non-resident filing form for NY (Form IT 203) and it gives me the option to give an EXACT amount.  Apparently the percentage/days based allocation is only for people who do not have exact amounts given to them by their employer. 

Why isn't there a place in the Turbotax software to add an exact amount.  And if you use the percentage option, TurboTax prompts you to fill out another form to verify the allocation you estimated is correct.  This would be completely unnecessary for me since I have an exact amount.  :(

[LayneNP]

@steveb257 According to the people I've spoke with at the NY state Department of Taxation, you CAN fill in the exact amount on their paper form and ONLY need to use that extra form if you are allocating by DAYS or PERCENTAGE (it's just a form that requires you fill in your data to justify/verify that your calculation is correct). 

I think it's a huge misstep for TurboTax software not to offer this as an option bc not only is it confusing but it also requires those of us who have an exact amount to fill out an extra unnecessary form (which also happens to be very confusing.  I think I'm going to try to file myself on paper.  Fingers crossed

[ikonst]

@LayneNP Did you find any documentation to substantiate that?

Page 20 of the IT-203 instructions says:

If you earned your salary or wages both inside and outside of New York State, you must determine the amount that is allocable to New York State. This is not necessarily the amount shown in the State wages, tips, etc. box on your Form(s) W-2.  ... To allocate income that does not depend directly on the volume of business transacted (for example, wages), complete Schedule A, Allocation of wage and salary income to New York State, on Form IT-203-B to determine the amount earned in New York State.

then going over the IT-203-B instructions, it goes right into days calculation... which, as you said, is pretty tedious and unneeded.

I've moved to a New York office mid-year and for me, allocation would preferably be a simple matter of including only wages received in New York. However, the phrasing of the instructions make it seem like NY intentionally wants to use an allocation method of their choice that might be favorable to them even if it doesn't accurately allocate the income.

Is there something I'm missing in my reading of the instruction? Is using the IT-203-B "sheet" optional?

[KarenJ2]

NY frequently audits nonresident returns for NY income.  In an audit, they will look for an allocation according to a fraction, the numerator of which is the number of days worked in NY and the denominator is the total number of days worked everywhere.

Don't forget the convenience of the employer rule, which basically says if a taxpayer employed by a New York employer works outside of New York for his or her own convenience, the nonresident taxpayer must count it as a New York workday.

[ikonst]

@KarenJ2 For a national company with offices in and out of NY state, what constitutes an “NY employer”?

I remember reading there’s significance to where your home office is: e.g. if you live in Texas and your normal office is a Texas one, the convenience rule does not apply. Is that true?

[ikonst]

@KarenJ2 I noticed that IT-203-B is not being attached by TurboTax to my returns. Is it merely a worksheet? If so, does it play a role in an audit?

[KarenJ2]

The IT-203-B must be included with your Form IT-203.

Please see the Application of Convenience of Employer Test for NY

[lennygundam14]

what if you're military and your wages are military pay and it was made outside of NYS?

[taxes_are_confusing]

This has been frustrating me as well. If I pick the "by days" method, the IT-203-B TurboTax is generating for me has my whole year income on it and I can't edit it without applying an override. From the IT-203-B instructions they clearly say to only include income from NY sources received as a non-resident, and if you moved to NY later in the year, to not include the resident amount on the form too.

If I pick the "by percent" method, there is no IT-203-B generated, and the instructions from IT-203 clearly say an IT-203-B is required to be filed if applicable.

I suspect I'll either have to apply the override or go with the "by percent" approach. Either way I'll probably have to print out my return and file by mail adding the additional IT-203-B that TurboTax won't generate.

[steveb257]

Has anyone found an answer on this? Allocating by percent in Turbotax still does not generate a IT203b? If you have exact wages from employer (box 14 info) why do you need a IT203b days allocation form? 

[LenaH]

If you have the exact breakdown of your wages on your W-2, you could estimate the amount of days for your IT-203B return. I previously explained why NYS requires the IT-203-B on my reply, which can be seen on NY state nonresident wage allocation methods.

Example:

$25,000 NYS nonresident wages  /  $35,000 resident wages of another state

$25,000+ $35,000 = $60,000

NYS nonresident wages are .41666 of the total ($60,000)

Resident wages of another state are .58333 of the total ($60,000)

Now, use the percentage allocation above and multiply it by the number of working days. Generally, if you work 5 days per week, it would be 260 days if you worked all year round and took no vacation time. Please adjust this depending on your situation. 

Then, you would take 260 days x .41666 for NY, which would be approximately 108 days. You would also take 260 days x .58333, which would be approximately 152 days. This would total out to the 260 days worked. 

@steveb257