Part-time resident in NY and NJ, W2 withholdings suggest a later move date than my actual. What should I file with?

[curious-manta]

I originally lived in NY, but moved out to NJ around March. My employer is in NY. I was originally expecting the move to be temporary but it became permanent for the year of 2020.

Based on my payslips, I notified my employer of the change around October of that year. On my W-2, boxes 15-17 put around 25% of my earnings as NJ wages (with 0 tax on them) and 100% of my earnings as NY wages.

When filling out my return, Turbotax asks for how long I was a resident of New York and asks me to calculate how much of my earnings were earned while in New York (as a fraction of how long I lived there) and the same for New Jersey. If I take the March date as when I made the move, a much larger fraction of my earnings would be NJ wages than the W-2 indicates.

Should I be filling my state returns based on the date of my original move, or would that cause issues?

[ErnieS0]

If you continued to work in New York after moving to New Jersey, then 100% of your wages are still taxable to NY. All that changes is the resident and nonresident portion.

For example if you made $12,000 ($1,000/month), you can change from $10,000 (Jan-Oct) resident wages and $2,000 nonresident wages to $3,000 (Jan-Mar) resident and $9,000 nonresident wages, but all the income is still taxable to NY.

You will see a screen Tell us about your New York nonresident income. Enter the amount while living in NJ here.

You would save on New York City income tax by changing your residency. NYC nonresidents do not pay NYC income tax.

Generally NY tax is higher than NJ, so you should still get full credit for NY tax paid on the NJ return whether you start your residency in March or October.

NJ will not complain if you report more NJ income than is shown on your W-2. NY may send you a notice if you were a former NYC resident. In that case, you should send some proof of change of residency, such as cancellation of your lease.

[TomD8]

NY tax rules are that you ceased being a NY resident (for tax purposes) when you abandoned your NY domicile and established your new domicile in another state.  See this reference for more detail:

https://www.tax.ny.gov/pit/file/pit_definitions.htm

[curious-manta]

Thanks!

What constitutes a proof of change of residency? For example, if I still had a lease in a New York apartment through July, would I be considered as a New York resident through July, even though I moved out in March?

[DanielV01]

New York is aggressive in tax enforcement, so you might want to have some additional proofs.  For example, did you change your license to New Jersey?  Did you sign a lease in New Jersey?  Did you start paying utilities in New Jersey?  Any proofs that clearly establish you were a New Jersey resident when you claim will be helpful.

[curious-manta]

I see; I'm not sure if I have much. I may be able to find some mail dated back that was sent to the NJ address but otherwise nothing immediately comes to mind. I've been paying rent but no structured/signed lease agreement (renting out a room in a house; close friend is the landlord).

Do address changes on bank statements work?

Or, if required, some sort of declaration from the landlord that confirms that I've lived there? This would only be if I receive a notice from NY, I assume.

If using October (accordingly with the address change on my payslips) will I still need this proof or would the payslips be sufficient? 

[DanielV01]

You are correct on all counts.  It sounds like you shouldn't have too much of a difficulty in proving at least from July if that's when your NYC lease ended.  But if New York asks, then you would need to submit proofs.  If the proof you can provide is a statement from your NJ landlord, you certainly may try to use that.  We can't guarantee what New York will accept, though.