I work for a NY company, remotely from NC. I spent 1 day in 2017 on site, but my W-2 has full salary in the state earnings boxes for both NC and NY. How can I allocate?

[Jpw15]

Update. NY State processed a full refund of tax paid in 2021 save for a bonus that was attributed to 2020 work. 
Thanks for the advice Kristine! 

[unknownzack]

That's great news!

I'm still waiting to heard back from NY after replying on 4/18/22. Will update once I hear back as well.

[kristinelbly]

@Jpw15 Thank you for letting me know the good news, I always love to hear it! 

[TomD8]

"Per Hayes v. State Tax Commissioner, 401 N.Y.S. 2d 876, “A nonresident who works in another State but who performs no work in New York is not subject to New York State tax liability no matter for whose convenience or necessity he performs the work.”

Bottom line: looks like the Hayes decision still holds.   

[unknownzack]

Want to provide a further update. 2021 NY & NYC full refund of taxes was processed after waiting for a few month. Thank you Kristine for all the assistance and advice!

[kristinelbly]

@unknownzack Very happy for you, and that you got to the right resolution! 

As an update, I am still seeing RFIs (requests for information) go out again for the 2021 tax year. I know some people were in touch with me before/during the summer, but I have since left my last employer and started my own company. So if you aren't getting a response here timely, feel free to look me up on LinkedIn or Google.  

[den99]

@kristinelbly 

I don't mean to bump an old thread, but this has provided me with some valuable information and I thank you for that! I do have a question I didn't see here that may help clarify for others who may read this thread.

I work remotely for a NY company from NJ (I do not go into the office) and upon receiving my W-2, I saw that they only withheld taxes for NJ. They don't have an entity in NJ, so I'm not sure how they did that, but do you believe I'd have to file a non-resident return or owe NY taxes? I work remotely and do not set foot into NY for work purposes. Thank you! 🙂 

[Vanessa A]

If you live in NJ and work remotely for a company in NY, but do not go into the office, then your employer would only need to withhold taxes for your home state of NJ. You do not need to file a NY non-resident return if you never step foot in NY. 

As long as you meet the Convenience of the Employer test, which most people do, you would not be subject to NY taxes, only NJ taxes.  So your employer is doing this correctly. 

[kristinelbly]

I need to edit my response, after I went back and read @Vanessa A message. 

She was correct in saying that because you worked no days in NY, you're employer was correct in only withholding taxes in your home state.

She was incorrect in saying that most people meet the Convenience of the Employer test, most do not. The reason you are not subject to tax in New York, is because if you worked 0 days in New York, and are not subject to the convenience rule. If you were, you would likely fail it (>95% + of taxpayers I represent would fail it). 

Here are the 2009 employer Withholding Guidelines issued by NYS, that contain language on Page 41, that allow them to not withhold if you work no days in NY:

Employees who expect to perform no services in New York may submit, but are not

required to submit, an IT-2104.1 to their employer estimating a percentage of services

performed in New York of 0%. The employer may rely on the IT-2104.1 as long as the

employer does not have actual knowledge or reason to know that the Form IT-2104.1 is

or has become incorrect or unreliable.

Your employer is one of few actually doing the right thing, kudos to them. 

[den99]

Thank you @kristinelbly and @Vanessa A ! For the first time since reading into this, I finally feel confident enough to file. I hope someone else in this situation will find this thread and be able to see this information as well. Thank you for being so thorough in following up. It is much appreciated. 🙂 

[DianeW777]

• The New York (NY) state law is quite clear at this point. As our Tax Expert pointed out, it must meet the Convenience of the Employer test.  If a nonresident whose primary office is in New York State, the days' telecommuting are also considered days worked in NY state unless the employer has established a bona fide employer office at the telecommuting location in New Jersey. 

NYS FAQs on Telecommuting Tax Situations: There are a number of factors that determine whether an employer has established a bona fide employer office at the telecommuting location.  

• In general, unless an employer specifically acted to establish a bona fide employer office the telecommuting location, will continue to owe New York State income tax on income earned while telecommuting. In addition, under the New York “convenience of the employer” rule, the wages of an individual who is a resident of a state other than New York but who works for a New York-based employer, are considered to constitute New York source income unless, out of necessity, the employee is obligated to work outside of the state.

@den99  | @kristinelbly  

[goodfella]

Just to clarify some answers here, there is a big difference between spending absolutely 0 days in NY and spending even just 1 day in NY.  If you truly spend 0 days in NY then the convenience of the employer rule does not matter - you don’t owe NY tax because you didn’t step foot in NY.  If you did spend even just 1 day in NY (for business purposes), then you need to fulfill the convenience of the employer test.  

[TomD8]

• I agree with @goodfella. 

Here is a link to the New York Statute governing this situation:

N.Y. Comp. Codes R. & Regs. Tit. 20 § 132.18 - Earnings of nonresident employees and officers | Stat...

You will note that the very first sentence of the statute states that it applies when an employee "performs services for his employer both within and without New York State".

Therefore an non-resident employee who performs no services within New York State is not subject to the "convenience" doctrine..

[AbrahamT]

See HERE as to what constitues Convenience of Employment for the purposes of not considering this work subject to tax.

Current application of the convenience of the employer test The instructions for Form IT-203-B, relating to Schedule A, Allocation of Wage and Salary Income to New York State, provide that: Work days are days on which you were required to perform the usual duties of your job. Any allowance for days worked outside New York State must be based upon the performance of services which, because of necessity (not convenience) of the employer, obligate the employee to out-of-state duties in the service of his employer. Such duties are those which, by their very nature, cannot be performed at the employer’s place of business.

[kristinelbly]

@DianeW777 With all due respect, please stop commenting on this thread. This is the second time you have responded with incorrect advice. You do not know the subject area well enough to comment, and are only adding to confusion to those seeking guidance. The person who commented said they worked ZERO days in New York, the convenience rule is NOT APPICABLE. PERIOD. 

Lots of people use this thread for help. I know, because I have received dozens of thank yous over the years in my inbox from taxpayers who have gotten money back from New York State they do not owe. 

@TomD8 ; @DanielV01 ; @goodfella Have been on this thread since it started several years ago, and are the only three "moderators" besides myself that anyone should be listening to. If you are reading this, wait for a response from one of those four people to answer your question.