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NYC income based on NJ and NYC incomes?

I work in NYC and my wife in NJ. Why is my NY State form based on both our incomes together and not just mine? Thanks
1 Best answer

Accepted Solutions
ChristinaS
Expert Alumni

NYC income based on NJ and NYC incomes?

A NY nonresident return (IT-203) is impacted by all of your income. That's because it calculates your tax based on all of your joint income calculated as if you were a resident, then allocates a percentage based on how much is attributable to New York State.

Lets say your total income was $120,000 and NY would tax you $6000 on that if you were a resident. If your NY-source income is 50% of the total ($60,000), then your ultimate NY tax is then $6000 *.5 = $3000

If your total income is lower, than the initial tax percentage could be lower.

The first calculation is impacted by graduated tax rates, since NY does not (like most states) have a flat tax. So, the more income between you and your wife together, the higher that "as if a resident" figure. The effective tax rate before the income percentage is calculated is impacted by total income.

You do get some tax benefits for having a joint NY return. You are getting either a standard deduction that reflects 2 people, or itemizing based on both of your expenses. So, its not entirely unfair in that regard.

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1 Reply
ChristinaS
Expert Alumni

NYC income based on NJ and NYC incomes?

A NY nonresident return (IT-203) is impacted by all of your income. That's because it calculates your tax based on all of your joint income calculated as if you were a resident, then allocates a percentage based on how much is attributable to New York State.

Lets say your total income was $120,000 and NY would tax you $6000 on that if you were a resident. If your NY-source income is 50% of the total ($60,000), then your ultimate NY tax is then $6000 *.5 = $3000

If your total income is lower, than the initial tax percentage could be lower.

The first calculation is impacted by graduated tax rates, since NY does not (like most states) have a flat tax. So, the more income between you and your wife together, the higher that "as if a resident" figure. The effective tax rate before the income percentage is calculated is impacted by total income.

You do get some tax benefits for having a joint NY return. You are getting either a standard deduction that reflects 2 people, or itemizing based on both of your expenses. So, its not entirely unfair in that regard.

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