Multiple State Wages and Taxes

[jesunattt]

I have 2 states wages and income taxes in W-2. One state is CA and another state is NY. I didn't stay anytime in NY during 2022. Should I file CA schedule S or file NY NR for full refund? Or should I do both? Thank you!

[BrittanyS]

You must file a New York non-resident return claiming the taxes paid.  Then you will file your California return and claim a credit for taxes paid to another state.  This will give you credit for the taxes paid to New York.  To complete the return in TurboTax, start your non-resident return first.  The credit for taxes paid to another state will be included when you complete the California return.

For more information, see the link below:

Multiple State Returns

[jesunattt]

both NY and CA state wage are the same which equals to my W-1 box "1" (I actually was not reside, nor work in NY the whole year). So state wages have been doubled. When I file NY NR return, if I allocate NY state wage to "$0" and I get full NY state tax refund. Do I also need to file Schedule S in CA return in this case? 

Or just make it simple, change W-2 box "16" NY wages to "$0" and add box "17" NY state income tax paid to CA state income tax paid? 

Will both above methods yield the same result? Thank you!

[ErnieS0]

The answer to your question depends on why your employer withheld New York tax if you never lived or worked there.

Did your employer make a mistake? If so, you can allocate your NY wages to $0 and claim a full refund. Use the Wages Allocation screen. 

Don’t “fix” your W-2. You can’t change your NY wages to $0 on the W-2 and claim NY withholding as CA withholding because it was never sent to CA. California will not give you any credit.

If you worked in NY in 2021 or before, part of your income may be taxable to NY if it includes things like unused vacation or sick time or stock options earned in NY but vested in CA.

Finally, NY follows the “convenience of the employer rule.” In some cases, a non-resident must pay tax to NY if their assigned “home office” is NY and they are working elsewhere by their own choice (their own convenience). 

Generally, this does not apply to someone who never works in NY but it depends on the individual’s situation.

Bottom line — you have to tell us why NY tax was withheld from your pay.

[jesunattt]

Hi,

I worked in NY in 2021 and moved to CA in March, 21. Maybe NY wage is from PTO or stock vesting from 2021.  But in 2022, I absolutely not work in NY nor home office in NY. I was whole year in CA and employer was also in CA.

It's absolutely impossible that both NY and CA state wage are exactly the same. If I didn't live in NYC for any day during 2022. How do I figure out how much of the wage is from CA payroll and how much of the wage is from NY sick/vacation pay + stock option vesting? Thank you!

[ErnieS0 · Accepted solution]

New York state requires employers to report total wages for the whole year in W-2 Box 16 so you’ll see 100% of your actual earnings there. It’s not your actual NY wage. That’s why TurboTax has a Wage Allocation section.

Contact your employer. If you had PTO or stock vesting that was paid or recognized in 2022 then some of your income may be taxed by both NY and California. If that’s the case, you would allocate your NY wages and claim a credit on the CA return for any tax paid to NY.

If you had no NY source income, you can allocate $0 wages or days worked to NY and get back all your NY withholding.

[jesunattt]

Got it. Thank you very much!

[Patch7158]

I also must file taxes in dual states; one where I reside and the other where I work (NY).  If both states require you to file taxes, you must do it.  NYS Form IT-203 - Non resident is the way to go.  You list the taxes you paid to the state and things calculate in accordance with the federal you are filing.  Also, in my case, my state of residency provides me with a CREDIT for the taxes paid to NY.  My employer also provides a W-2 with my state's jurisdiction, so it's easy for me to do.  Turbo Tax has been my choice of software for years, and the process is easy.  Best of luck to you.