NY state nonresident wage allocation methods Turbo Tax issue

[steveb257]

When filling my NY state tax return the interview asks to allocate the wages by either 100% NY, percentage or days worked. I have been given an exact amount in BOX 14 for wages from y employer

When selecting percentage Turbotax no longer includes the IT203B schedule A allocation form. The IT203B states this is a requirement. Can someone please advise if I can file the IT203 without the IT203B without issue? I assume this is why Turbotax is excluding the form. 

[LenaH]

No. Per New York State, if an amount is included on line 1 (wages) of Form IT-203 in the Federal amount representing income earned from work within New York State and outside of New York State while a nonresident, and that income does not depend directly on the volume of the business transacted (for example, hourly wages), you must complete IT-203B, Schedule A to compute the amount earned in New York State. 

However, if you look at Form IT-203-B, it allocates income based on the number of days. You stated that you allocated based on a percentage and the IT-203-B was removed from your return after you chose that allocation method. 

Please choose the number of days allocation method to have Form IT-203-B included on your return.

[steveb257]

Thank you! Ok so what if the wages are from a bonus that was paid out in the prior year and no days were actually worked in NY for this tax calendar year? Turbotax interview wants IT203B for days worked 2020. When I use this method the wages put on IT203 line 1 for state are greater or less than NY wages my employer gives me and withheld on. 

Bonus paid in 2020 for 2019 and did travel to NY during that bonus cycle. 

[LenaH]

If you worked 0 days in New York, then you would allocate 0 days in TurboTax. You can do this even if your W-2 reflects a different allocation. 

I did a mock-up return for this situation. I used New Mexico as my resident state and New York as my nonresident state with my wages divided on my W-2 input on the federal side. 

• On the page Total Days Employed, I entered 366
• On the page Non-Working Days, I entered 20 under Other Nonworking Days
• On the page Work Days Outside of New York, I entered 346 in the column Outside of New York (please note - there are different rules for telecommuting due to Covid-19)
• TurboTax then allocated 100% of my New York allocated wages on my W-2 to my resident state. It shows $0 under Wages for New York. 

@steveb257

[steveb257]

Thanks again for following up here. I understand the 0 days and the result will be $0 wages with that IT203B scenario. However my employer specifically cites in box 14 = NY WAGES = $x dollars. So I have actual NY wages that I need to report. I am reporting box 16 as the full amount then I have the lesser amount in box 14 attempting to prove to NYC how I determined the allocation. 

Using the turbo tax method option "allocation by percentage" gives the most accurate result but no IT203B schedule A form. Using days I have to indicate 2 days in order to come close to the amount. In your scenario in the first response I get 1.4 days. 

[LenaH]

Box 14 of your W-2 is typically for additional information and would not determine the taxation on your return for your multi-state allocation. Box 14 of your W-2 is a catch-all for items that don't have their own dedicated box on the W-2. Employers can put just about anything in box 14, so it's very common to have random or missing information in there.

I am not sure why your employer would put NY wages in Box 14. What category did you choose for this item? You are reporting the NY wages when you input the information in Boxes 15-17. 

To test this situation, I entered the NY income in Box 14 (as shown in Box 16) with the category of Other in my mock-up return. It had no effect on my return.

Lastly, you do not have to enter any days. If you have no source income for NY, then you can enter 0 days. Again, this amount in Box 14 of your W-2 has no effect on your return. 

@steveb257

[steveb257]

In this case I do not think the box 14 is random. It is the employer providing the exact wages they allocated to NY in this case. Since NY handles box 16 amount differently than most states. I think Turbo tax is attempting to handle a complex situation but the online version is limited as it relates to form editing. So in my case when allocating "percentage" is most accurate method to the box 14 information. However Turbo tax then will not include the IT203B which is a requirement as stated. So when I "allocate by days" it then includes the 203B but the wages are not as close to the BOX 14 amount. I cannot refine to the actual amount 1.4 days. I have to enter 1 or 2 days and I then have lower or higher wages. 

@LenaH

[SteveF4]

I have a very similar situation.  My former employer withheld NY taxes in 2020 because I paid a small amount of tax in 2019 due to work travel to NY.  @LenaH , I went through similar process as you described to indicate 0 work days in NY.  All was fine when I entered the numbers, but in the Review section it was flagged as an error and TurboTax won't let me e-File with NY State unless my number Outside of New York work days is less than my total work days.

Specific Numbers:

Total Days Employed = 83

Non-Working Days = 34

Work Days Outside of New York = 49

Any advice?

TurboTax is demanding that I use a number less than 49 and will not continue with the e-File process.

[pranilrao]

Hello @LenaH Can you explain what are the rules for covid19 telecommuting which you reference here?

I worked in my company's NY office until March and then worked from my house in CT for the rest of the year. I received two W2s from my company  - for both states. For NY State W2, there is a specific line added to denote NY State wages. This is not one of the regular numbered boxes, but just text in header. In turbotax, I cannot enter the specific amount for allocation. If my full year wages are considered, my NY tax dues are a very large amount since my company did not deduct NY taxes from paycheck starting April! But when calculated by percentage they seem to be manageable.

Please advise.

[DMarkM1 · Accepted solution]

The box for days worked outside of NY are days worked outside of NY, but allocated to NY because you only did so due to necessity, COVID for example.  So, @SteveF4 the box for outside of NY is actually a NY workday so the number cannot be higher than total workdays. 

Any days that do not belong to NY as explained below do not go in the boxes. 

See below for the NY explanation.  

 @pranilrao

Extracted from NY Form IT-203B Instructions.

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 or her employer. Such duties are those which, by their very nature can not be performed at the employer’s place of business.

Applying the above principles, normal work days spent at home are considered days worked in New York State, and days spent working at home that are not normal work days are considered to be nonworking days.

Under this rule, days worked at home are considered New York work days only if the employee’s assigned or primary work location is at an established office or other bona fide place of business of the employer (a bona fide employer office) in New York State.

If the employee’s assigned or primary work location is at an established office or other bona fide place of business of the employer outside New York State, then any normal work day worked at home would be treated as a day worked outside New York State.

If an employee’s assigned or primary office is in New York State, any normal work day spent at the home office will be treated as a day worked outside the state if the employee’s home office is a bona fide employer office. Any day spent at the home office that is not a normal work day would be considered a nonworking day  

[Christine266]

I am frustrated that I cannot put the days allocation for the New York IT-203-B in to TurboTax like last year. (We are full NJ residents, but my husband's employer always puts wages in Box 16 on the NY W-2 that I need to allocate downward. Even when I switch from Interview method to Forms, this form is not even on the list this year.  When I search and locate the form it lets me input some information but does not seem to be interactive input.  For example, if I have 35 days worked in NY our of 242 working days, I was 0.1446 to appear on line 1n.  But it's not doing any math, or even letting me put the answers that I want.  Alternatively, when I try to use the NonResident/Part Year resident interview section, the only thing I can modify is some income from Government Savings Bond.  HELP.  

[CF23]

I have a related question.  In my case, I live in CA but telecommuted from NY for a couple of months last year.  My employer is also in CA.   I believe I need to file NY state taxes for the ~60 days worth of wages that I earned during that time (I did not have NY tax withheld while I was there).  A complication is that my W-2 total includes regular salary, plus some other amounts like bonuses which were based 100% on days I was not in NY.  So in this case, do I split the W-2 into multiple pieces (one for the wages, based on # of days, and one for the bonus, based on 0%)?  Or maybe just calculated it offline and enter the final amount?  Thanks for any help.

[LenaH]

You can allocate based on percentage. Take your total New York wages divided by your total wages to come up with a percentage. Then, use this percentage on your New York return. 

@CF23

[Anonymous]

As a NJ resident with NYS source income, I'm comfortable with the # of days allocation method. However, my scenarios has changed where I'm no longer employed (termination date was 9/2021) but I was still entitled to retain my previously issued RSUs which subsequently vested in Jan 22, Jan 23 and Jan 24 hence I'm still receiving W2 from this former employer with NYS source income.   So how exactly do use the # of days method when I'm no longer employed by the company and every day is "non working day" for me ?

[AmyC]

RSU is sourced using a grant-to-vest method. You will use the workday allocation factors for the years between the date on which the options were granted and the date on which the options vested. Please begin at the bottom of page 3 of this NY government document and follow the instructions for your situation.

@Anonymous