NY state taxes on W-2

[Mikey2277]

Hello,

I received my 2025 W-2 today and I believe it may have wrong information. I am hoping that a member of the community can help me understand New York state tax requirements. 

In 2025, I lived and worked in North Carolina until the end of July. (I had submitted my resignation letter in mid-July and my final day of employment in North Carolina was July 24th.) About a week later, I relocated to New York. 

My former employer included income for both North Carolina and New York on my W-2. These amounts are listed in box 16 (one on top of the other). However, I never worked for the company while living in New York. That said, I did receive my final bonus after separation (from a prior quarter). The amount of the bonus was significantly less than the state wage amount shown in box 16 for New York. 

I called HR at my former company and was told that even though I never worked for the company while living in New York, they have to report the North Carolina source income to New York now that I live here. 

Can someone confirm if this is accurate? 

Thanks in advance! 

[ThomasM125]

Yes, it is accurate, a resident of New York is required to report all income received even if from work out of state. To avoid a situation where you are double taxed, when your tax is calculated in New York, you are given credit for the percentage of your income earned out of state. For instance, if half of your income was earned in New York and the other half in North Carolina, your New York income would be the sum of income from both states. Your New York tax would be calculated based on that income, but then the final tax you pay would be 50% of the tax calculated on your total income.

[Mikey2277]

Thanks for the response! I’m now confused on the definition of “resident” for New York. My situation is this: from August-December of 2025, I was living with family in New York. I never intended for New York to become my permanent residence or domicile. During that same time period, I didn’t work in New York at all (zero income). Does this still qualify me as a “resident” for tax purposes? I don’t own property in any other state. 

[LindaS5247]

You are considered a New York resident for tax purposes if you meet one of two conditions: the domicile test or the statutory resident test. 

Being classified as a resident means all of your income, regardless of where it is earned, is subject to New York State personal income tax. 

Domicile Test

Your domicile is your permanent and primary residence, the place you intend to return to. You can only have one domicile at a time, and changing it requires clear evidence of abandoning your New York domicile and establishing a new one elsewhere. 

According to New York State Tax laws, New York is considered to be your "Domicile" if it was your primary residence (the only place you lived) and the place that you would come home to if you were away, such as on vacation. If challenged in an audit, New York considers factors such as the location of your home, active business involvement, time spent, location of treasured personal items, and family connections. 

Statutory Resident Test

You can also be considered a New York resident even if your domicile is elsewhere, if you meet two conditions during the tax year: 

1. Maintaining a permanent place of abode in New York for substantially all of the year. This is generally any building suitable for year-round living that you permanently maintain.
2. Spending 184 days or more in New York State during the tax year, with any part of a day counting as a full day.

For more details on residency determination, you can refer to the New York State Department of Taxation and Finance website. 

Tax residents are taxed on all income, regardless of source, while non-residents are only taxed on NY-source income. 

Please return to Community if you have any additional information or questions and we would be happy to help.