Generally speaking, living abroad temporarily (where the word
"temporary" here can mean a period from as short as a few days to as
long as an indefinite number of years) does not change someone's legal
domicile (a well-established legal concept). Thus, moving abroad
doesn't normally change a United States taxpayer's responsibility to
file and pay taxes to their "home" state.
However, New York is something of an exception to these otherwise normal rules. Please allow us to explain this.
Typically,
New York taxpayers living and working in another state, or in a foreign
country, have to pay taxes to New York state on all of their earnings,
wherever in the world they earn income. Moreover, they do not change
their full-year New York resident status by simply living in another
state or country -- as long as they maintain their New York domicile.
However,
New York does allow some exceptions to this, in contrast to the tax
practices of most other states, for those New York residents who live
overseas for an extended period of time.
It seems that you could
very well qualify for such an exception, if you've been living abroad "long enough." In order to determine that with certainty, however, and
to help you define your own residency status for New York state tax
purposes, please refer to the following New York Department of Taxation
& Finance document (you can click on the link to open it):
https://tax.ny.gov/e-services/training/preparer/pdf/Residency%20and%20Allocation%20Rules%20for%20NYS...
In particular, please see Pages 6 through 10 (Slides #'s 5 - 9).
See
also Pages 13 through 23 (Slides #'s 11 - 21), and the discussion there
on "Nonresident Domiciliaries." It is possible that you may qualify for this tax benefit. New York
state nonresident tax status, for income tax reporting purposes, is
granted to those otherwise New York residents living overseas, even if
they maintain their permanent legal domicile in New York and will
eventually return to it, if they can satisfy the tests described
therein.
If you can meet those tests, by virtue of living in another country, then you can qualify as New York nonresidents for state tax
purposes (although you still are required to file a US federal tax
return; although you could also take the foreign earned income tax exclusion). In such an event, you may not even have to file a New York tax
return if you don't want to. For more information on the requirement
to file a New York tax return while classified as a nonresident, please
see the following webpage:
https://www.tax.ny.gov/pit/file/nonresidents.htm
To the extent that the New York information above conflicts with the TurboTax software recommendation, you should side with the facts provided by the New York Department of Taxation and Finance rules. While TurboTax is a wonderful tool, its in-program suggestions are not always right in every single instance, especially where unusual filing issues and unique state exceptions to them (like NY and overseas taxpayers) are involved.
Thank you for asking this important question.
