I live in UT, worked for a CA company in Washington DC but got a W-2 from NY. I was told to file NY state but it says I owe more than I made. What allocation do I use?

[Mel5]

I'm mostly 1099 income but had one employer hire me for a week as W-2. Employer is from CA, I worked in DC, got W-2 and apparently paid state taxes to NY. I was told to file a state in NY but owe TONS more than makes sense. Got to page about wage allocation and don't know what to put there. Then TT auto-populated Federal Income; Gains & Losses; Rentals, Royalties, Partnership (but I don't know where those numbers come from) and is asking for me to fill in New York Source Portion. What is that? This is so confusing why it's basically taxing me twice, right?

[DanielV01]

Did you telecommute for a NY company from home?

[melray1134]

It was a CA company that flew me to DC to work. I wasn't actually in NY, but the W-2 I got from them was from NY.

[melray1134]

Thank you! Can I ask a dumb question: what's a diagnostic in terms of taxes?

[DanielV01]

It's at the end.  TurboTax may say: You have to e-file NY, it's the law....Ignore it.  You can't efile a $0 income return, has to be mailed.

[DanielV01 · Accepted solution]

You will need to prepare a NY return, but allocate the NY income as zero.  You will need to mail in the return.  You will get a big diagnostic that says that NY requires you to e-file your return.  However, this does not apply when the software cannot e-file for a diagnostic such as filing a zero-income return.  You may wish to submit some evidence that no income was earned in NY and you were not a NY resident, and the NY taxes withheld should be refunded to you.