NY or PA

[jtmpaul1]

A significant portion of my income comes in the form of a bonus and is payable in the first quarter of the year.  I bought a house and moved from NYC to PA in April of 2020.  My work location was recorded as NYC throughout 2020 and still is although I have been working from home in PA since last April. Since there are multiple methodologies permitted for allocating income between states it seems like I should choose the one that shifts the maximum allowable income to PA?  Am I thinking of that correctly or does it not matter since I will be taxed by NY since I "work there" and have to use that as a credit for PA?  

[ErnieS0]

All your income is taxable to New York if your employer did not change your "work location" to Pennsylvania after you moved to the Keystone State.

New York follows the convenience of the employer rule and says, "If you are a nonresident whose primary office is in New York State, your days telecommuting during the pandemic are considered days worked in the state unless your employer has established a bona fide employer office at your telecommuting location."

Your income will also be double-taxed from the point you become a PA resident, though you can claim a credit on your PA return for tax paid to NY.

You should allocate your bonus to your state of residence at the time of receipt, which sounds like NY.

Related Resource: 

• Frequently Asked Questions about Filing Requirements, Residency, and Telecommuting for New York Stat...