norcalea Posted February 22, 2015 Report Share Posted February 22, 2015 I'm in CA and have a influx of NY returns to do this year. Clients have income on w-2 from NY employers but they have moved to California and are now working in CA for said employers. I would normally allocate the income to CA from the time they become CA residents but have had one TP say his employer told him that NY wants the whole years income . ( The w-2s are allocating all income to NY) I found the NY PY instructions a little confusing regarding what is NY source income and what isn't for non residents. I understand they want severance pay related to NY employment but this is not the case. Clients now live in California, perform all work in California but employer is NY. Can someone with more experience with NY tell me if they have claim? Quote Link to comment Share on other sites More sharing options...
MsTabbyKats Posted February 22, 2015 Report Share Posted February 22, 2015 (edited) If the person is a part year NY resident....they only pay tax on that income earned during the period of residency. It doesn't matter where the employer is. Just like every other state...... It's more complex if a person is a non-resident and works in multiple states, including NY. That's when the entire income is reported. And then the NY per centage allocated. Edited February 22, 2015 by MsTabbyKats Quote Link to comment Share on other sites More sharing options...
Lion EA Posted February 22, 2015 Report Share Posted February 22, 2015 If they are telecommuting for their own convenience (spouse works in CA, for instance) then NY says their work is controlled by their NY firm and is NY sourced income. If they now work for the CA branch of a large employer and used to work for the NY branch, then now it's CA income. Do they still report to their NY boss? NY is very aggressive. Quote Link to comment Share on other sites More sharing options...
MsTabbyKats Posted February 22, 2015 Report Share Posted February 22, 2015 If the W-2 shows the NY income as the same as the box 1 income you have to allocate what per centage of the total of all W-2s is NY income. (Sorry...I missed it was all showing as ny income on the original post). Quote Link to comment Share on other sites More sharing options...
Don in Upstate NY Posted February 22, 2015 Report Share Posted February 22, 2015 If the W-2 shows the NY income as the same as the box 1 income you have to allocate what per centage of the total of all W-2s is NY income. (Sorry...I missed it was all showing as ny income on the original post). This is always the case. The NY instructions for preparing the W2 say that the NY income (as shown on the W2) must equal the federal income. No allocation is allowed in preparing the W2. All allocation must be done by the taxpayer on the IT-203. Quote Link to comment Share on other sites More sharing options...
michaelmars Posted February 22, 2015 Report Share Posted February 22, 2015 Don is right, NY is a pia Quote Link to comment Share on other sites More sharing options...
MsTabbyKats Posted February 22, 2015 Report Share Posted February 22, 2015 This is always the case. The NY instructions for preparing the W2 say that the NY income (as shown on the W2) must equal the federal income. No allocation is allowed in preparing the W2. All allocation must be done by the taxpayer on the IT-203. To be more specific...you need to fill out the IT 203-B to do the allocation....and you also have to do something with the "days of residence" on the same form. Quote Link to comment Share on other sites More sharing options...
norcalea Posted February 22, 2015 Author Report Share Posted February 22, 2015 First, I want to say thank you to this board. I really appreciate all of the help. This is definitely the most helpful site I know. I definitely can allocate on the 203B but my question is Ny entitled to this income because the job originated in NY? My choice is allocate to CA for the days he is a CA resident or include both places and take a credit in CA to account for double taxation? If I simply allocate to CA will NY fight us on that? The small employer did stop withholding for NY once the TP moved to CA. Unfortunately they did withhold for CA though. Quote Link to comment Share on other sites More sharing options...
MsTabbyKats Posted February 22, 2015 Report Share Posted February 22, 2015 First, I want to say thank you to this board. I really appreciate all of the help. This is definitely the most helpful site I know. I definitely can allocate on the 203B but my question is Ny entitled to this income because the job originated in NY? My choice is allocate to CA for the days he is a CA resident or include both places and take a credit in CA to account for double taxation? If I simply allocate to CA will NY fight us on that? The small employer did stop withholding for NY once the TP moved to CA. Unfortunately they did withhold for CA though. Yes...NY will fight you...and they will win...and your clients will all get those letters. It's just a stupid way to do things...and is based on a percentage. They changed to this crazy system about a decade ago. Whatever the NY tax ends up being...I would take a CA credit for tax paid to NY on that amount. I don't know how your program works..and I haven't done one of these in a long time...but I remember doing a manual calculation. Quote Link to comment Share on other sites More sharing options...
MsTabbyKats Posted February 22, 2015 Report Share Posted February 22, 2015 Just want to add...the customer service at NYS tax dept is decent...so if you're confused, they can explain it better Quote Link to comment Share on other sites More sharing options...
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