NYS <--> ME - bona fide employer office + domicile

[specialmonkey]

I work for an NYC-based company that's close to approving my work remote from Maine request.

Before submitting the request, I want to understand my tax liability.

My employer asked me to provide my new address and said I must live there for them to move forward.

I asked how they would deduct taxes from my pay if I moved but am still waiting to hear.

I've been living with my girlfriend in Maine for almost the entire pandemic but I own a coop in Brooklyn.

I would like to sell it. I've spent less than 75 days in NYC during the pandemic.

I seem to qualify as a Maine resident having spent the majority of my year in Maine - maintaining or helping to maintain an abode - but also seem to qualify for paying NYS+NYC taxes due to my domicile being in Brooklyn?

The test for domicile seems very difficult.

I still have stuff in my apartment, but also have stuff in my Maine residence (my girlfriend's house in Maine).

I have clothing, musical instruments, cameras, books, bicycles, a home office, computers, etc.

I pay a bit of money to her every month by personal check to help with expenses and continue to pay my mortgage and coop maintenance expenses.

I don't have family in NYS. My employer and apartment are the only significant ties I have to NY. My family ties are primarily in Rhode Island, Washington, DC, and Florida.

I like my job and don't think I can find a similar paying one in Maine. I might find something similar in Massachusetts but getting a remote work arrangement to start could be difficult.

I haven't changed my mailing address, got a Maine driver's license, new doctors, or emptied my apartment of my belongings. Should I? My electricity, gas, and internet are still active in my apartment. My coop has a rental policy. I can rent the apartment for up to 2 years. I'm not keen on renting my place out - plus it still has my belongings inside.

The belongings are important and more numerous and valuable than what I moved to Maine - yet I have not returned to these belongings in months. Should I move more belongings to Maine (even if I don't miss them), to help with domicile test?

I'd like to avoid double taxation and ideally pay only a lower tax in Maine?

I believe Maine had amnesty for COVID-19 teleworkers living in Maine but working for companies in other states, those people were not required to file Maine income taxes (so I didn't). I expect that to change next time.

I ended up paying NYS+NYC taxes and no Maine taxes last year because I didn't think I could qualify as not being domiciled in Brooklyn. Even though I only spent < 75 days in NYS. My paychecks & w2s have NYS/NYC taxes taken out.

I would consider selling my apartment if I could get enough for it, and if it would limit my tax liability to NYS by no longer having the domicile question lurking.

I do feel anxious about it because I'm not sure the situation with my girlfriend will work out in the long run. I could find an alternative arrangement in Maine if it didn't, but not for the amount I'm paying my girlfriend, who is accepting what I can pay (because I'm still paying a mortgage & maintenance in NYC). She would like me to sell the Brooklyn place and help her out more with her mortgage, etc.

Does Maine offer credit for income taxes paid to another jurisdiction? If this were the case, I think taxes I paid to NYS+NYC could be applied to my Maine tax liability - probably cancelling it out due to a likely higher NYS+NYC rate vs ME.

I've been reading about "bona fide employer offices" - does working in a different state i.e. in my home office in Maine qualify as a "bona fide employer office" - and if so does that preclude NYS/NYC from taxing my income (even though it is from an NYC company)? This may hinge on my domicile too?

My job only requires internet access and a computer. I don't use any other special equipment.

Who has to attest or prove (and how) that my Maine home office is a `bona fide employer office' - me or my employer?

If Maine does offer credit for taxes paid to another jurisdiction, might it be easier just to pay what I am required to as someone with a domicile in Brooklyn (which I believe would be the full-year NYS/NYC resident amount) - or should I try to be a non resident and attempt to change my domicile? If they don't offer the credit, I might be on the hook for NYS+NYC+ME taxes?

Will it be worth it to try to convince NYS my domicile is now Maine. I'm not a super highly paid worker by NYC standards, I make roughly 100k gross per year. I use deductions on my taxes for mortgage interest, and anything else I can.

I don't know when I could sell my apartment, and have a feeling it will not be a quick sale.

Thanks for any insights into my situation.

[SundayInSalem]

Ownership of your coop in Brooklyn makes you a resident of New York, even if you spent less than 184 days in the state. If you cut all ties to NY (except your job) your salary would still be considered NY source income and subject to nonresident income tax unless you have a “bona fide” office in Maine. In either case, 100% of your NY income will probably be taxed by NY as it would be difficult to establish a "bona fide" office in Maine if you are living there merely for your own convenience, i.e. to be with your girlfriend and because it's cheaper.

New York says a taxpayer maintains a “permanent place of abode” in NY if they do “whatever is necessary to continue their living arrangements in that place. In most cases, this means that you own or lease the place where you live.”

New York further explains that if “you can stay there whenever you want, you are maintaining a permanent place of abode, even if you only stay there occasionally.”

Attorneys Timothy Noonan and Emma Savino of Hodgson Russ LLP, who specialize in New York state taxation, explain that New York follows the “leave and land” rule, meaning it’s not enough to leave NY.  You must also "land," i.e. establish a new permanent or indefinite basis. "Merely being absent from New York for some period of time without landing in another place will not suffice," they write.

You have not “left” New York because you still own a coop where you stay occasionally and where you still keep personal possessions. You also have other ties to the state, such as having a New York driver’s license.

See COVID-19: The Year of the Great Migration

Teleworking

New York aggressively taxes and audits teleworkers. Even if you sold your condo and cut all your ties to New York except for your job, you may still be subject to NY income tax as a nonresident if you “home office” remains in NY.

You would have to establish a “bona fide” office in Maine in order to escape NY tax. To have a “bona fide” office, your office would

1. Either contain or be near specialized facilities that cannot be made available at the employer’s place of business but are available at or near the employee’s home, or
2. Meet enough secondary or other factors, such as (a) a home office is required as a condition of employment, (b) a legitimate business purpose for having a home office in Maine, and/or (c) employer reimburses home office expenses.

See New York Tax Treatment of Nonresidents and Part-Year Residents Application of the Convenience of the...

Other State Tax Credit

Maine offers a credit for tax paid to another state.

See Credit for Income Taxes Paid to Other Jurisdictions