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Is my remote income taxable in New York State?

SOLVEDby TurboTax23Updated April 06, 2022

Your remote work is considered taxable if you’re doing it for yourself and not because your employer requires you to work remotely. If you’re unsure, here’s how to figure out whether your remote work is taxable or not:

To determine if your remote income will be taxed by the State of New York, New York considers if you work both:

  •  In-person at a physical office (inside the state)
  • Remotely (outside the state)   

For example: You live in New Jersey, but commute to a New York office. If you choose to work remotely for part of the week to save on gas costs, you’re doing so at your convenience, not because your employer requires it.  In this case, the state of New York would tax you.

So: 

  • If you sometimes work remotely outside the state for your own reasons, yes, your income will be taxed
  • If you sometimes work remotely outside of the state because your employer requires you to, no, your income will not be taxed.

It’s also helpful to understand your residency status.  Read the next section to review the differences between full-time, part-year and nonresidents. 

Full time 

Generally, you're considered a New York State resident for income tax purposes if New York State is where your primary residence is located and is the state listed on your tax forms. For more info, go here

So:

  • As a resident, yes, you pay state tax (and city tax if a New York City or Yonkers resident) on all your income—no matter where it’s earned. 

Part year

You're a New York State part-year resident if you meet the definition of resident or nonresident for only part of the year. For more info, go here

So:

As a part-year New York resident, no, your income will not be taxed as long as:

  • None of your income is earned inside the state of New York 
  • Your home office meets all the necessary requirements of a legitimate employer office (Continue to the section of this article: ??Do you work mostly out of your home office?)

If this is true for you, here’s how to enter New York State income as a part-year resident in TurboTax. 

Nonresident

You're a New York State nonresident if you were not a resident of New York State for any part of the year. For more info, go here

So:

As a nonresident, you only pay tax on New York-based income, which includes:

  • Earnings from work performed in New York State, and 
  • Income from real property located in the state 

If this is true for you, here’s how to enter New York state income as a nonresident.

Your remote income is taxable if you’re working from a home office mainly for your own convenience and not because your employer requires it. But, if your home office is considered a legitimate function of your employer’s business (or a requirement) you may avoid income tax. 

Here’s how to figure it out: 

For your home office to be legitimate, your office must contain special facilities that aren’t available at your employer’s place of business.  

For example: Consider a scenario where your job duties require the use of a specialized track to test new cars. This track isn’t available at the employer’s offices in New York, but it is available near your home in Pennsylvania. 

So:

  • If your employer requires you to work remotely outside of New York— no, your remote income will not be taxed, or 
  • If your employment requires the use of specialized facilities outside of New York— no, your remote income while using those facilities will not be taxed.

If this is true for you, here’s instructions on how to enter New York State income as a nonresident in TurboTax.

Your income won’t be taxed if your home office meets at least four secondary factors as well as at least three other factors. 

Secondary factors include:

  • Your home office is a requirement or condition of your job (for example, you were hired as a full-time, remote employee and your employer requires you to have a dedicated home office space) 
  • Your employer has a legitimate business purpose for your home office location (for example, your employer sets up a satellite office to service customers in a specific region)
  • You complete some of your job's the core duties at your home office (for example, patient notes, billing or admin-related work) 
  • You meet with clients, patients or customers on a regular and continuous basis at your home office
  • Your employer doesn’t provide you with designated office space or a regular work area at one of its regular places of business
  • Your employer reimburses the expenses for your home office

Other factors include:

  • Your employer has a separate telephone line and listing for your home office
  • Your home office address and phone number is listed on the business letterhead or the business cards of your employer
  • You use a specific, separate area of the home exclusively to handle business for your New York State employer 
    • Note: The home office will not meet this requirement if the area is used for both business and personal purposes
  • Your employer’s business is selling products and you’re responsible for keeping an inventory of the products in your home office 
  • Business records for your employer are stored at the your home office
  • Your home office location has a sign which includes your employer's business name
  • Your employer's advertisements shows your home office as a place of business for your employer
  • Your home office is covered by a business insurance policy or by a business rider on your homeowner insurance policy
  • You’re entitled to, and claim a deduction for home office expenses related to federal income tax
  • You aren’t considered an officer of the company

So, your remote income will not be taxed if you fulfill: 

  • Four of the requirements from the secondary factors list, and 
  • At least three requirements from the other factors list

For more info, review the Application of the Convenience of the Employer Test to Telecommuters and Others.

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