TX Domicile, NY Remote work

[as10bs]

Hi -- I would love some help from this community in identifying if I need to pay taxes to NYS. I was domiciled in TX in 2020, working for a company at their TX location. When COVID-19 hit, I went to NYC around spring last year, stayed there for ~150 days, and worked remotely for the same company location in TX. Would the income that I received during my time in NYC qualify as NY source income? Do I owe taxes to NYS? If yes, is there an alternative to calculate taxes and not follow the (days worked in NY)/(total days worked formula)? I received an annual bonus in early 2020, and it is included in my AGI. Based on NY's calculation methodology, I will be paying taxes on my bonus to NY, which I think won't be fair.

Appreciate your thoughts!

[BillM223]

"Would the income that I received during my time in NYC qualify as NY source income?" Yes.

And more to the point, the income you earned while working from Texas for a New York company is probably also New York Source income.

New York is (almost) unique in that it taxes work done for New York (State) companies, even if you are not physically present in New York.

The big exception is when you work out of state "at the convenience of the employer". That is, if you work from Texas because you live in Texas, you are not in Texas for the convenience of the employer...but if the employer told you, "the job is in Florida" so you move to Florida, then that IS at the convenience of the employer, and so not taxable in NYS.

You can read all about this at this New York State webpage. 

So, you file as a New York nonresident, but report all your income as New York source income. 

It's not a big burden for many taxpayers, because the tax paid to New York becomes a credit to the resident state taxes...but Texas doesn't have a state tax, so the credit is no good...

You might do an Internet search for "new york telecommuter tax", and you will see plenty of quality articles on this subject.

[Opus 17]

@BillM223 customer did not say it was a NY company, it appears it was a TX company, unless there are additional facts not stated.

@as10bs if you perform services for your employer while living in NYC, that is NY state and NYC source income, even if the employer is headquartered out of state.

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

You owe New York and New York City a non-resident tax return that reports and pays income tax on your New York source income -- that is, income you earned while living in New York City for those 150 days.   Income that was paid before you moved to NYC or after you left (such as your bonus, apparently) is not NY source income.  

The instructions for form IT-203 require you to allocate your total federal income to NY sources.  You should be able to simply list all your income you earned while living in NY, from your paystubs based on when you worked and were paid.  The worksheet on page 18 of the instructions does not require you to divide the total income by the number of days.  Where did you get that calculation?

https://www.tax.ny.gov/pdf/current_forms/it/it203i.pdf

[BillM223]

@Opus 17

You are correct that I read his/her question as referring to a New York State company. And in my defense, "working for a company at their TX location" does not sound like the company is headquartered in Texas.

However, it is a valid point for the taxpayer to determine if the company is in fact a New York State based company. If so, then the taxpayer lists all income as New York source income. If no, then only the income earned while physically present in New York is New York source income.

[BillM223]

@as10bs

Good! Just as long as the company that is paying you is not a subsidiary incorporated in NYS, then you are OK.

Yes, to living in NYC prior to 2020.

Did you "move" to Texas? That is, did you relocate in the sense that you got a Texas drivers license, registered to vote in Texas, own property/signed a lease in Texas, have your mail sent to Texas?

I ask because most states consider you a resident until you have changed your Domicile to another state, and you do that by doing a lot of the things I just listed.

I will note that New York State will consider you a resident for tax purposes if 

• you maintain a permanent place of abode in New York State for substantially all of the taxable year; and
• you spend 184 days or more in New York State during the taxable year. Any part of a day is a day for this purpose, and you do not need to be present at the permanent place of abode for the day to count as a day in New York.

See this New York webpage.

So, did you keep your place in New York when you left for Texas, and were you in New York for 184 or more days in 2020?

If yes, then you file as a resident; if not (as I suspect), you file as a nonresident.

[as10bs]

@BillM223 thank you for the response! Yes, I moved to TX in the first week of Jan 2020 and established my domicile there -- apartment lease, driver's license, mail, etc. I kept my NYC apartment until July 2020 but spent only ~150 days there and overall in NY during 2020. 

I am positive that I qualify as a non-resident/part-time but I am not sure how to address it in Turbotax and what forms to fill -- Page 18 or Schedule as I indicated in my previous response.

[Opus 17]

@as10bs 

As long as it is not a New York-based company, then you need to file a nonresident NY return that only reports your New York income that you received during those 150 days. In the personal interview for TurboTax when you enter your Texas address, it should ask you if you earned money in any other state. You would answer yes and indicate New York. Then, the program should ask you if you were a New York resident or non-resident.  After you complete the federal tax return and go to the state module, you should be asked how many days you lived in New York and you should be asked to allocate your New York source income and any tax deductions.  

[as10bs]

Thanks @Opus 17.