Work in NY, Live in NJ: NY Income Allocation

[sceptre18]

I live in NJ and work in NY, so when doing my NY nonresident state taxes, I was prompted with the question "Were all of your wages and/or your self-employment income earned in NYS?".  After clicking yes it asked me to enter my New York Income Allocation of interest income & capital gains/losses.  I left 0 because those were from banking interest & stocks, but then it's asking me if I "allocated my income to New York based on the volume of business transacted" and "Do you need to fill out the nonresident business allocation schedule to allocate New York State Business Income".  I clicked no to both because I'm not sure if I need any of that since I am just an employee working in NYS and I do not own a business.

My questions, 1. Am I doing this right so far?  I work a normal salary job in NYS, but live in NJ.  Have stocks, retirement funds, bank savings accounts.

2. How would I know if I need to fill out a nonresident business allocation schedule?

[ErnieS0]

Yes. You are filling out New York correctly in TurboTax. Great job!

If you worked in NY all year, all your wages were earned in New York state. Nothing else is taxable to NY since you are a New Jersey resident. Zero is correct for stocks, etc.

You do not need to allocate because you are an employee and you worked in NY state all year so you do not have to allocate elsewhere. NY considers telecommuting from NJ to be working in NY, so if you occasionally worked from home, all your income is NY income.

[paradoxdl]

>>>NY considers telecommuting from NJ to be working in NY, so if you occasionally worked from home, all your income is NY income.

Ernie, what if I worked from home for MOST of the year, due to Covid. I live in NJ, and haven't stepped foot in my NY office since March. Do I need to allocate my NY State Wages to NJ, or should it still be consider NY Income?

Thank you!

[LenaH]

Yes, it is still considered New York State income. Per NYS, days worked at home are considered New York work days 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.

For more information, please see Instructions for Form IT-203. 

@paradoxdl

[mfbahler]

Hi Ernie,

Attempting Turbo Tax for the first time...I live in NJ; my company's office is in NYC.  Pre-pandemic, I worked remotely 1/2 of the time--doing research and writing, not telecommuting.   For Jan & Feb 2020, I worked in NYC for a total of 30 days, and I am claiming as such.  I am stuck on the NY Income Allocation portion of Turbo Tax where it asks me to list NY Source Portion for Interest Income; Dividend Income and Capital Gains & Losses.  Please advise!  Thank you!

[AmyC]

@mfbahler  Only wages are taxed to NY, no interest, capital gains/ losses, etc.

[mfbahler]

Amy, if you could answer a few more questions, I would appreciate it...

Should I be putting anything under the NY Source portion for NY non-resident deductions under Self-Employment tax; self-employment SEP; or charitable contributions?  (I'm presuming no since only my wife is self-employed and all of her work takes place in NJ; nor do we donate to charity through work.)

It seems something remains wrong with the NY portion on TurboTax.  We usually owe NJ a bit and get a generous refund from NY.  However, this year, it's showing that we owe NY.  Any help you lend will be greatly appreciated!

[DanielV01]

@mfbahler You might have to go back through the NY Allocation screen interview, particularly the "days worked in New York" method.  Double-check to make sure that you have input the correct number of working days in New York versus days in the year and the number of "non-working days" so the program can figure out the correct amount of New York income.  Also, you may want to check if filing New York as Married Filing Separately would be more advantageous, since your wife does not have New York income.  In either case, deductions from her income are not based on New York sources, so you are correct in answering no on those questions.

With the pandemic from last year, there is no telling what differences you are seeing from your 2019 return versus your 2020 return, but that's the best way to compare why you are seeing a difference.  Feel free to comment any additional clarifying information if you wish.