Tennessee & NYS

[99sld]

I am very new to all of this tax stuff.  I live in Tennessee but the company for whom I work issued my W-2 from New York State.  Will I always have to pay taxes to New York State even though I do not live there? If so, how can I reduce my tax liability in New York when I incur no expenses there?

[ErnieS0]

You do not have to pay New York tax if you never live or work in New York.

You can file a nonresident income tax return and claim a refund by reporting $0 wages to NY.

Be aware New York is very aggressive in taxing remote workers so it’s possible you may lose and have to pay tax even if the facts are in your favor.

New York follows the “convenience of the employer” rule, meaning if your employer says your “home office” is New York and you are considered to be working in Tennessee out of your personal choice, then NY may say you are a NY employee, even though it would be silly for you to commute from TN to NY every day. 

The best solution is to ask your employer to change you to a Tennessee employee and stop New York withholding.

Read the answers from @kristinelbly, a former New York State auditor in “I work for a NY company, remotely from NC. I spent 1 day in 2017 on site, but my W-2 has full salar...

[99sld]

Thank you so much for taking time to respond and help.

[ErnieS0]

How you file is your choice. If you never set foot in NY, you should not have NY tax withheld.

If you lived in a state with an income tax, there's not too much of a tax difference because your home state will give you credit for NY tax. However, since you live in TN, you're paying a lot of tax you don't need to.

If you do file a nonresident return, consider not spending the refund for at least a year in case NY comes back at you.