I lived in MA the entire 2018, and the first 6 months I worked in MA, but took a new job in NY, so the last 6 months I worked in NY but still lived in MA.
The question I have is, when filling out NY taxes do I only enter the W2 that had NY taxes on it or do I combine both MA+NY W2 wages? Likewise, would when submitting MA taxes, would I only enter the W2 that paid MA taxes?
Thanks in advance.
you will do the non-resident state first (NY) and only list the NY income and related tax withholdings
Then complete the MA taxes where all income, even that earned in NY gets listed, MA should give you a credit for what is due to NY so that you are not taxed twice on the same dollar
The W-2 you received should clearly state the income earned in each state and the tax withholdijgns of each state
if you are using TT, it will figure all this out for you.
The New York calculation throws many people off. They do include your total income as taxable, then calculate the tax and reduce it by the percentage of income allocated to other states.
Using your example, let's assume the tax on $100,000 is $10,000. Your New York return will show taxable income of $100,000, then calculate $10,000 in tax. The following step will be to reduce that by 50% (the percentage of income earned out of state), leaving you with $5,000 in tax owed to New York. Using this method allows the state to collect a higher rate of tax on your income, which is why you are not seeing the refund you expect. You can see the calculation on Lines 45 - 47 of your IT-203
you will do the non-resident state first (NY) and only list the NY income and related tax withholdings
Then complete the MA taxes where all income, even that earned in NY gets listed, MA should give you a credit for what is due to NY so that you are not taxed twice on the same dollar
The W-2 you received should clearly state the income earned in each state and the tax withholdijgns of each state
if you are using TT, it will figure all this out for you.
Thanks for the quick response. I am using TT and the thing that concerned me was that at the very end of the NY taxes, the Summary page listed my combined total income from both states:
Example - I was a MA resident entire 2018:
MA - $50k Jan-Jun
NY - $50k Jul-Dec
NY summary page states total income as $100k, so that made me assume I'm paying NY taxes for the entire year. And the fact I'm not getting all the NY taxes returned, only about 23% of what I paid is getting refunded - does that sound right?
The New York calculation throws many people off. They do include your total income as taxable, then calculate the tax and reduce it by the percentage of income allocated to other states.
Using your example, let's assume the tax on $100,000 is $10,000. Your New York return will show taxable income of $100,000, then calculate $10,000 in tax. The following step will be to reduce that by 50% (the percentage of income earned out of state), leaving you with $5,000 in tax owed to New York. Using this method allows the state to collect a higher rate of tax on your income, which is why you are not seeing the refund you expect. You can see the calculation on Lines 45 - 47 of your IT-203