When claiming an other state tax credit, do you include all the out of state income you were taxed for or only the portion you were a resident in that state?

[marissa73188]

Income for the entire year was earned and taxed in California, but I resided in New York for part of the year.  When filing a NY return, should the information on the other state tax credit form be my entire income taxed in California or just the portion earned while residing in NY (or is this automatically calculated?)

[MaryK4]

For the credit for taxes paid to another state, it would only be the amount you earned in California while you were a New York resident.

[marissa73188]

Thank you for the response.  I suppose my question is more specific, when filling out the other state tax credit section, it says "New York total" and lists my entire income (it can't be changed), then I have to input the "Portion taxed by California".  Should I input the entire income there too since it was all taxed by California (and the NY column lists the entire amount)?  If I put the amount earned while a NY resident, that leaves me owing a reasonable amount to NY.  I don't know if this is factored in automatically using the length of time and income proportions input earlier.
Thank you so much for the help!

[MaryK4]

Thanks for the clarification.  Did you have the same employer?  

Did you change residency to New York (permanent move) or was it temporary?  

If you filed a Part-Year California return, you would report the wages to show what you earned while working in California.  If you are filing a Part-Year New York return, you would do the same.  

The reason for the credit for taxes paid to another state is so (in most cases) you do not pay tax twice at the state level- but you only report income (in most cases) to the state where you actually work.   @marissa73188

[marissa73188]

I did have the same employer in California the whole time, I had started work remotely from NY and was technically a legal resident of NY while living there in the beginning of the year before moving permanently to California.

I was preparing a part year return for both California and New York since I was a resident of both during the year, despite having all my income sourced and taxed in California-is this not the correct approach?
I assumed I technically owed NY taxes during the period I was a resident and was adding the other state tax credit on the part year NY return, which is where I was confused about what income to input.

[ErnieS0]

New York requires employers to report total income in the New York state wages box (W-2 Box 16).

There is a place in New York to adjust the amount to show what you actually earned in NY.

1. On New York Income Allocation, say No to Were all of your wages and/or your self-employment income earned in New York State?
2. Edit Your W-2 on Your Form W-2 Summary
3. Choose Allocate by Number or Days or Allocate by Percentage on Allocate Wages to New York (percentage is usually the easier calculation)

If you are a part-year resident, then you would not have any double-taxed income. You would adjust your California wages to report the amount you earned while you lived in CA.

If you were a CA resident for the whole year and were temporarily in NY, you would file a nonresident NY return and claim a credit on the CA return for double taxed income.