Why does New York State Turbo tax allow for deduction of investment advisory fees

For the first time, NY State is allowing Itemized Deductions in the 2018 tax return. In general, your New York itemized deductions are computed using the federal rules as they existed in the Internal Revenue Code (IRC) for tax years before 2018. Finance Advisory Fees could be deductible on your state return for NY.

You said the expenses could be deductible.  Other than things like income related phase outs, can you describe other reasons investment expenses might not be deductible?

New York State has decided to decouple from the Federal Tax Cuts and Jobs Act (TCJA) and stay with the rules that existed prior to the 2018 tax year.  Here is a link with more discussion on the differences in NY and Federal tax changes. 

"You will be allowed to itemize your deductions for New York State income tax purposes even if you choose not to itemize on your federal income tax return.  Therefore, you can still deduct, as itemized deductions, the following items which are either limited or not deductible for federal tax purposes:

1. Total of your state and local real estate taxes paid that exceed the $10,000  federal limit.
2. Casualty and theft losses are only deductible if they occur in a federally declared disaster area.  New York State will allow them regardless of where they occur.
3. Miscellaneous deductions that are no longer allowed for federal purposes remain deductible by New York State. They are limited to two percent of your federal adjusted gross income consisting of un-reimbursed employee business expenses, job related education expenses, tax preparation fees, investment expenses, and union dues."

NY Department of Taxation and Finance issued a Technical Memorandum TSB-M-18(6) on December 28, 2018.

"New York State itemized deductions
You may choose to itemize your deductions for New York State purposes for tax years
2018 and after, even if you did not itemize on your federal income tax return. New York opted
not to follow many of the federal itemized deduction changes made by the TCJA for tax years
2018 and after, so you may be able to claim some deductions on your New York personal
income tax return that are no longer available for federal purposes. For example, you may be
able to claim deductions for:
• state and local real estate taxes paid, including amounts over the $10,000 federal limit;
• casualty and theft losses, including those incurred outside a federally declared disaster
area;
• unreimbursed employee business expenses; and
• certain miscellaneous deductions that are no longer allowed federally (e.g. tax
preparation fees, investment expenses, and safe deposit box fees)."

March 11, 2025 I cannot find anything on NY Taxation web site that supersedes this memo.

Also on NY Website is this 2024 memo

For federal purposes, you can no longer claim an itemized deduction for job expenses and certain miscellaneous deductions that were subject to the 2 percent of **bleep**I limitation. For New York purposes (Form IT-196, lines 21 through 24), you can claim these deductions:

• 2017 IRS Publication 463, Travel, Entertainment, Gift, and Car Expenses
• 2024 IRS Publication 463, Travel, Gift, and Car Expenses 
• 2017 IRS Publication 529, Miscellaneous Deductions (which says investment expenses are deductible)