W-4 and form IT-2104

[Avickowski1]

I live in Connecticut and am in the process of getting hired at a company in White Plains, New York. This is the company's only location. I will be working somewhat of a hybrid format, where I will mainly work remotely, from home in CT but occasionally go to NY for appointments with clients. I am single, no one can claim me as a dependent, I have zero dependents, and this job would be my only job/source of income.

I am filling  out my W-4 and IT-2104. On the IT-2104, it asks at the top, "Are you a resident of New York City?" and "Are you a resident of Yonkers?" to which I selected "No" for both. 

Under that, lines 1 and 2 ask: 1) Total number of allowances you are claiming for New York State and Yonkers, if applicable (from line 19, if using worksheet) and 2) Total number of allowances for New York City (from line 31, if using worksheet). It also says, "Before making any entries, see the Note below, and if applicable, complete the worksheet in the instructions." The aforementioned note says, "Note: Single taxpayers with one job and zero dependents, enter 1 on lines 1 and 2 (if applicable). Married taxpayers with or without dependents, heads of household or taxpayers that expect to itemize deductions or claim tax credits, or both, complete the worksheet in the instructions."

My questions are as follows: What would I put on lines 1 and 2 for total allowances I am claiming for New York State and Yonkers, and total allowances for New York City? As per the "note" mentioned above, since I am single, with one job (this job), and zero dependents, I should put "1" on lines 1 and 2. However, I am confused because it says "if applicable" so I do not know what it applies to vs what it does not apply to? Additionally, I don't know if it changes anything that I am a non-resident of NY, and that the company is not located in New York City, just White Plains (New York state). 

I asked the hiring manager/lady I've been in touch with during the hiring process, what I should put on lines 1 and 2. She said to ask my accountant about tax withholdings when you work across states, and that I might be paying double taxes but she is not sure. Unfortunately, I do not have an accountant that I could ask. 

Please help me figure out what to put in lines 1 and 2!

[Opus 17]

@TomD8 

Here's your first problem.  New York taxes remote workers in your situation.  But your state of residence will also tax you.

However, you are not subject to New York City or Yonkers tax unless you actually physically live in the city, even if you work in the City.  Technically, you owe city tax if your domicile (permanent residence) is in the city, or if you maintain a permanent place of abode for more than 184 days.  That means that if you keep a NYC apartment for when you need to meet clients, you owe NYC tax even if you stay in the apartment less than 184 days, because the apartment is a permanent place of abode.  But if you use hotels, AirBnB, or similar, then you do not have a permanent place of abode and are not subject to city tax.

For state tax, if you live out of state but have a job that is located in NY state, and you physically work in NY state for at least one day of the year, then all your income from that job is subject to NY state income tax.  Meanwhile your home state will tax you on all your world-wide income (job, but also investments, interest, lottery prizes, and so on.). Your home state will give you an offsetting credit so you may end up owning very little CT income tax, but that's hard to anticipate without more exact figures.  But you may need to arrange for some CT withholding, or do some estimates of your CT taxes and make voluntary quarterly estimated tax payments.  If you overpay the estimate, you get the difference back as a refund.  

The instructions and worksheets are here.

https://www.tax.ny.gov/pdf/2024/printable-pdfs/inc/it2104i-2024.pdf

I can't tell you what to put on line 1 and line 3, but since you will check "no" for the residency boxes, you will live lines 2, 4 and 5 blank, since you will not have city withholding.

(Unless you plan to maintain an apartment for your visits, then you are a resident, and should fill out lines 2 and 4 or 5 according to the instructions.)

[TomD8]

New York has step-by-step instructions for completing Form IT-2104 here:

Instructions for Form IT-2104 (ny.gov)

Your Line 1 allowances will be determined by the worksheet in the instructions.  You will have zero allowances on Line 2, since you are not a resident of NYC.  (I am assuming you will NOT maintain a place of abode in NYC and spend 184 days or more in NYC.)

Since you are a non-resident of NY whose assigned office is within NY, and you will be performing some work remotely from a location outside NY, you will be subject to NY's "convenience of the employer" rule.   This means that, unless you are required or assigned by your employer to work from a location outside NY, the income you earn by working remotely will be considered "New York source" income and thus taxable by New York.  You can read the details of the "convenience" rule here:

https://www.tax.ny.gov/pdf/memos/income/m06_5i.pdf

The "if applicable" phrase in line 1 means "and Yonkers, if applicable".

ALL your income, including your New York earnings, will be taxable by your home state of CT.  But CT will give you an "other state credit" for the taxes you pay to NY.  The credit prevents double taxation, which is prohibited by federal law.  At tax time you will be filing both a non-resident NY tax return and your home state CT tax return.  Using TurboTax, you'll file the non-resident NY return before you do the home state CT return.  The program will then calculate and apply the "other state credit."