New York State Part Year Resident

[Steve M]

Doing a favor return for a client. Her daughter lived in both NY and Ct for 2011. All income comes from CT. When I fill out NY IT-203 allocation of income worksheet, col D asks for income earned during residency in NY state, even though not earned in NY. This person is paying taxes to CT for entire year; does NYS give a credit for taxes paid there? Do you really pay NYS income tax on earnings from outside the state? Do you pay taxes to both states. Something is not right and I can't find it.

Would appreciate some input.

Thanks,

Steve M

[Catherine]

NY taxes on income while a resident no matter where earned. CT should give credit for tax paid to NY; sometimes not dollar-for-dollar but better than nothing.

[Steve M]

Thanks for your response. I did find the credit in CT; it helps a little.

[Lion EA]

The NY credit for taxes paid to other jurisdictions while a NY resident is something like Form 112-R or C. You pay tax where you work, for your friend it'll be CT. Then her PY CT return will be pretty normal. For her PY NY return you'll report income earned while a NY resident and CT taxes paid on that income. You'll get a full credit in NY, because CT's tax rates are lower (not by much since their last tax increase!). If you don't find the form, bump this up so I know to go into a NY resident return and look for the form #.