Must I file NY state return?

[akrupitsky]

I work in NJ but I used to work in New York City until a few years ago. However I still get two W-2 forms, one for each state (and it's a mess every time) b/c my employer pays some small awards in the forms of company shares spread over the next 4 years. E.g. the award for 2019 is spread over 2020-2023 . Thus, each year I get smaller and smaller amount on my NY W-2. This year, my NY state tax withholding was less than $50, to give you an idea of the size of this nuisance.

Anyhow, after I jumped all the hoops, and possibly screwed up in the process, TT confidently told me that I must e-file in NY. Now I'm not sure whether this is literally true or TT meant that if I file then I should e-file. For completeness, I do have some dividend income from NY and maybe capital gains/losses (from the abovementioned  shares) but much less than NY standard deductions.

So I have a belated suspicion that I wasted time and effort and I didn't have to file in NY. If so, what do I need to do with the second W-2 that TT dutifully imports? Just delete it? Or enter manually just one of them?

[LenaH · Accepted solution]

It is likely you have to file a New York State return. Per New York State, you must file a nonresident return if you meet any of the following criteria:

1. You are a nonresident with NYS income and your New York adjusted gross income Federal amount column (Form IT-203, line 31) exceeds your New York standard deduction.
2. You want to claim a refund of any New York State, New York City, or Yonkers income taxes withheld from your pay.
3. You want to claim any of the refundable or carryover credits available.
4. You had a net operating loss for New York State personal income tax purposes for the tax year, without having a similar net operating loss for federal income tax purposes.

If you look at the Form IT-203, you will see that the lines being referred to for criteria number 1 are the amounts reported on your federal return for each item of income or adjustment. On the other hand, the column on the right is the income included in the Federal amount column that you received from New York State sources.

Therefore, you must compare your federal adjusted gross income with the New York standard deduction to determine if you need to file a New York State return. I have attached a screenshot below of the standard deduction amounts below.

Your awards are considered New York State sourced if they are for your employment when you worked in New York, even if they are received years later. For more information, please see Income Received by a Nonresident Related to a Business, Trade, Profession, or Occupation Previously ....

@akrupitsky