NY nonresident filing question

[zg1212]

I am filing tax return for my son, who had summer internship income from NY, and also income from home state MI.

I can technically do the NY forms, but I don't understand one thing:

On form 203 page 1, there is one column for total (fed) income and one column for NY income. On page 2, the tax is calculated as NY tax on the whole income then multiplied by the ratio of NY income to total income. Why isn't it just NY tax on NY income? The tax calculated by the first way is $150 more than the second way.

Thanks if you have any answer to this.

ZG

[ThomasM125]

That is just the way they tax income for non-residents in New York. All of your income is taxed, and then it is reduced by a factor dependent on the percentage of income earned in New York versus all of your income earned.

[zg1212]

Thanks for the answer, at least got an confirmation from an expert to say that is the way it is, instead of me understanding the form wrong.

I understand home state has the right to tax everything, then to give proportional tax credit for income tax paid to other states. Considering NY is not the home state, and the tax concept is NY taxes nonresident only on income from NY source, and the NY income is clearly isolated on page 1, form 203 really should carry over NY income instead of Fed income to page 2.

In current way, non NY income is used to push the total income to higher bracket. Even with the reduction by proportion, NY state still gets more tax money from nonresidents.

Thanks again ThomasM125.