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avneige
Returning Member

I live MA but took a consulting project for a company in NY. Do I file state taxes in NY? The project was 2 months. Do I pay estimated quarterly taxes in both states?

I also will have paid a resource more than $600 and need to send her a 1099. Are there advantages to hiring someone within the state I live (MA)?

1 Best answer

Accepted Solutions
Opus 17
Level 15

I live MA but took a consulting project for a company in NY. Do I file state taxes in NY? The project was 2 months. Do I pay estimated quarterly taxes in both states?

You owe NY state a non-resident tax return that reports and pays tax on your NY-source income only.  Then on your MA return, you get a credit for out of state taxes that you pay which reduces (mostly) the impact of double taxation.  In Turbotax, prepare the NY return first, then the MA, so the credit flows in the correct direction.  You would need to make NY estimated payments for the NY taxable income.  6% is fairly typical, it could be less for small jobs.  Here is a link.  You can make the payment by check or online. https://tax.ny.gov/pit/estimated_tax/default.htm

If you are hiring a subcontractor, it doesn't really matter tax-wise where they are located.  If you hired the subcontractor to work on your NY-source job, it's an expense on your NY return even if they are located elsewhere.

*Answers are correct to the best of my ability at the time of posting but do not constitute legal or tax advice.*

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5 Replies
Rainman12
Level 10

I live MA but took a consulting project for a company in NY. Do I file state taxes in NY? The project was 2 months. Do I pay estimated quarterly taxes in both states?

1) To what extent were you physically present in NY?
2) Does/did your 'resource' do similar work for other people? Was this a person, or corporation you used?
avneige
Returning Member

I live MA but took a consulting project for a company in NY. Do I file state taxes in NY? The project was 2 months. Do I pay estimated quarterly taxes in both states?

1) I was never present in NY. I work from home in MA.
2) The person I used is a freelance graphic designer who does do this work for others as well.
Opus 17
Level 15

I live MA but took a consulting project for a company in NY. Do I file state taxes in NY? The project was 2 months. Do I pay estimated quarterly taxes in both states?

You owe NY state a non-resident tax return that reports and pays tax on your NY-source income only.  Then on your MA return, you get a credit for out of state taxes that you pay which reduces (mostly) the impact of double taxation.  In Turbotax, prepare the NY return first, then the MA, so the credit flows in the correct direction.  You would need to make NY estimated payments for the NY taxable income.  6% is fairly typical, it could be less for small jobs.  Here is a link.  You can make the payment by check or online. https://tax.ny.gov/pit/estimated_tax/default.htm

If you are hiring a subcontractor, it doesn't really matter tax-wise where they are located.  If you hired the subcontractor to work on your NY-source job, it's an expense on your NY return even if they are located elsewhere.

*Answers are correct to the best of my ability at the time of posting but do not constitute legal or tax advice.*
avneige
Returning Member

I live MA but took a consulting project for a company in NY. Do I file state taxes in NY? The project was 2 months. Do I pay estimated quarterly taxes in both states?

Thanks for the advice. Are there any impacts to hiring someone on a project basis from the state I live in versus out of state?
Opus 17
Level 15

I live MA but took a consulting project for a company in NY. Do I file state taxes in NY? The project was 2 months. Do I pay estimated quarterly taxes in both states?

Not that I know of, assuming the person is an independent contractor.  If you are hiring a regular employee, it makes a great deal of difference (wage and hour laws, proper withholding, workers comp, etc.)
*Answers are correct to the best of my ability at the time of posting but do not constitute legal or tax advice.*

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