NY W2 Box 16 same as Box 1 but I only spent 50% of the time in NY

[edwsurewin]

Hello,

I have two W2, one of which is from NY State. It shows on my NY W2 that box 16 is equal to my total federal wages (box 1), even though I only spent half of the year in NY. Hence, roughly 50% of Box 1 was earned in NY.

I spoke to my employer, and they said it's a state requirement that as long as I ever worked in NY in the year, the total state wages for box 16 would show my federal total on box 1 - on the NY W2. In this case, in filling out my W2 info, do I supply what's printed on W2 (hence my total federal wages) despite only a fraction of it was actually earned in NY?

[ToddL · Accepted solution]

Report your W-2 exactly as it was prepared for you.

Yes, what you are seeing is accurate, but NYS (or NYC) is not taxing the income you made before you became a resident.

Your total 2016 pay appears in the NY forms, summaries and interviews because NY uses your entire AGI to calculate your tax on NY income.  They do this  even if you were a resident of New York for 1 day

It isn't, however, as bad as it appears. They calculate what your New York tax would have been if you earned everything in NY, but then prorate that tax based on how much of your income was earned while a NY resident. 

For example, if the NY tax on your entire 2016 income was $10,000 but only 30% was earned as a NY resident, your NY tax would be 30% of $10,000 = 3,000.

Why do they do this? So they can tax your NY income at the highest possible tax rate, based on your entire AGI.

[kitsalas]

I have the same situation. I tried to enter the same values as my W2, and it ended up showig that I owe New York a lot since it’s calculating state tax for the whole year. I haven’t been working and living in New York for over half the year. What am I missing?

[cecileboucheron]

Did you sort it out? I'm in the same situation. I moved out of NY in March but the NYS tax due is for the full year :(

[edwsurewin]

Hi, yes I sorted it out. Just report what's on W2. As stated in the answer, the NYS wanted the extract the maximum possible tax so it applied the highest tax bracket applicable to your full-year Fed income. In the TurboTax interview, there's a question where it asks how much of the income was actually earned in NYS - that's where you split the %.

[mcmolino]

Good thread. Had same question and this helped. But specifically where in TurboTax does it let you actually split the % or amounts between both states?

[Connor M]

I worked in NY 1 day while on tour. I now have a W2 from NY that states that I earned the total amount of my gross income in NY ($32,000, box 16), but that I paid taxes in NY according to the actual amount I made ($2.68, box 17). Other states that I worked, such as PA, show exactly what I actually made in that state ($229, box 16).

In NY, will I be charged taxes on the full amount I earned Federally even though I only actually earned $229 in the state?

Thanks,

[SusanY1]

Your New York tax is calculated on your total gross income from all sources, but then the tax itself is pro-rated to reflect the proportion of that income that was actually earned in the state.  For example, it may calculate that your tax on $32,000 is $1,000.  Then it will determine your percentage of income earned in New York.  I'll say 1% here which would make the tax $10.  (These round numbers are just for illustration, I do not expect your tax to be $10.) 

@Connor M

[Connor M]

Thanks Susan!

One last question: If I only made $230 dollars total in NY state, but $32,000 federally, does NY require me to file regardless of my low state income? 

I mean to say, can I decide to not file with NY at all? (p.s. my employer already withheld the tax due)

Thanks again,

[CatinaT1]

Here are the NY filing requirements.

https://www.tax.ny.gov/pit/file/do_i_need_to_file.htm

[JJL666]

Hi, Susan,

have a related question.  My employer is based in NY and I'm a NJ resident.  My W-2 withheld NY taxes and I have always filed a non-resident return for NY and the NY tax withheld is credited to my NJ tax.  My question is: in 2020 due to Covid, I spent most of the year working from home.  Does that change how I file the state returns?  Specifically, do I still answer "Yes" to the question "Were all of your wages earned in NYS"?  

[LenaH]

If you are a nonresident whose primary office is in New York State, your days telecommuting during the pandemic are considered days worked in the state unless your employer has established a bona fide employer office at your telecommuting location.

There are a number of factors that determine whether your employer has established a bona fide employer office at your telecommuting location. In general, unless your employer specifically acted to establish a bona fide employer office at your telecommuting location, you will continue to owe New York State income tax on income earned while telecommuting.

Frequently Asked Questions about Filing Requirements, Residency, and Telecommuting for New York Stat...

@JJL666

[az148]

@Connor M Did you get this sorted out? are you required to file for NY? thanks 

[RaifH]

If you have NY sourced income and your federal Adjusted Gross Income exceeds the New York standard deduction amount for your filing status, then you are required to file a NY state return. 

@az148

[Aoiree]

Another related question with a different wrinkle.

Fact Pattern:

• PA resident all year.
• Remote employee all year.
• Same employer all year.
• Employer reassigned my "office" from New Jersey to NYC mid-year and began withholding NY Taxes in lieu of NJ taxes (actually PA taxes via reciprocal agreement with NJ.) For simplicity sake lets say this took place on July 1st and is roughly 50% of the year for each state.
• I happened to go out on Parental leave + Vacation for ~75% of the NY period of the year.

Reading the NY State non-resident allocation guide there's an exercise to determine NY share of wages via working days in state vs working days out out of state.

Question:

Do I...

1. Go by the payroll/calendar year split and assign 50% wages to NJ vs 50% wages to NY?
2. Do I use that NY State non-resident allocation "days worked" guide  to determine NY State wages, which because of the parental leave and vacation days ends up more like a 75% NJ sourced wages, 25% NY wages.
3. Is it even weirder where NJ tax law says go with calendar days of 50% and NY tax law says go with 25% "days worked in state"?

Feels like a weird one and I can't quite figure out which one hits law as written.

I'm guessing #1 is at play but its not fully reconciling with what I'm reading.