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Level 2
posted Mar 3, 2020 8:47:18 AM

NY/IL Allocation of Deferred Income

During 2019 I received 4 installments of quarterly deferred income payments from a previous Illinois employer.  All income was deferred while I lived and worked in Illinois. I was a part-year resident of Illinois and New York City during 2019 when I received the income. W-2 shows state tax withheld in both IL and NY. How do I allocate the income to state? Are both states going to tax the income? Seems like double taxation if they do, no?

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1 Replies
Expert Alumni
Mar 3, 2020 10:22:34 AM

In TurboTax there are allocation worksheets for the states that as you go through the screens you will see when you set up your information that you were a part-year resident of two states.  You tell the program what income is taxable for each state.

 

No, both states are not going to tax the income.  

 

Generally the deferred income is taxable to the state where you lived when you worked to earn the income.  

 

Here is an article with more information Strategies for Managing Your Tax Bill on Deferred Compensation

 

You may also find this article helpful Multiple States-Where To File