Income not being allocated correctly for NY State taxes

[mnhuss16]

I worked remotely for a job outside of NY for about half of the year before relocating and moving to NY. As such, I need to allocate how many days/what percentage of my gross income was earned while in NY for my state taxes. Whenever I attempt to allocate the wages (via percentage), my refund doesn't update, nor does the "New York Wages" page after the allocation forms are completed. It simply remains as showing "Total Wages" being equal to "Wages for New York". I also do not see the refund being updated. 

Even when I swap back and forth between 100% and 10% allocation, the refund doesn't seem to update or react at all. Is there a way to confirm that my allocation is being taken into account for the final calculation? My NY state tax summary is saying that I owe ~$2,000 in addition to an "underpayment penalty". I'm almost sure that this is incorrect as I calculated how much taxes I should owe to NY and I have already paid that amount through withholding. This makes me think that something may not be getting calculated correctly. 

I saw in a previous post that the next step is for me to "share my file with an agent" using Tax Tools. I went ahead and did that and my token number is 1095266.

Please help me solve this! Thank you

[BillM223]

Was this remoted work outside of NY for a NY company? I ask because NY taxes all work done for NY companies whether the taxpayer was physically in New York State or not. That is, NY taxes telecommuters for NY companies whether they are physically in New York or not.

[mnhuss16]

Yes, the remote work outside of NY was for a NY company.

So does that mean that I am getting taxed twice on the same income? I paid VA state tax while I was living there and working remotely and now I owe more taxes to NY on that same income? Am I understanding correctly? 

[BillM223]

Different states address the issue of double taxation in different ways. Generally, this boils down to allocation of income or tax (both ways are used), or giving a credit in one state for taxes paid on the same income in another state.

If you were a resident of VA when you started this work, then you would enter your NY information first, then subsequently enter your VA information. 

This would calculate your NY tax on 100% of your income. This amount would carry over to form OSC on your VA return, and appear on line 24 on your VA 760 or VA 760 PY. Thus, you would pay all your state tax to NY, and little or none to VA.

Did you intend to change your domicile to NY in 2022? That is, did you intend to move to NY permanently? If not, then you would file VA resident return (I assume that your domicile was in VA in 2022 and before) and a NY nonresident return. The "other state credit" would work in VA just the way I described above.

If, however, you moved to NY on a permanent basis in 2022 (i.e., intended to changed your domicile), then you would file a NY part-year return and then a VA part-year return (that is, you would enter your data for these returns in that order). Although the mechanics may vary (income allocation versus tax credit), I believe that the net result will be similar - you will pay all your state to NY and none to VA because you will get a credit on your VA return for tax paid to New York.

Make sense?

[mnhuss16]

Yes, that was very helpful thank you very much! The key was the do the NY return before the VA return.