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Yardley CPA

New York City - Part Year Resident

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MFS lived in Brooklyn NY from 1/1/18 through 7/31/18.  Moved to Chicago on 8/1/18 and lived in The Windy City for the remainder of the year.  For the entire year, he worked at a New York City business.  In completing his NY Part-Year Return, It seems the allocation from the IT-203B is not populating the IT-203. That results in his entire NY wages being taxable in NY.  Is that correct?  

IT-203:

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Shouldn't the allocated amount, 52,749,  from the IT-203B, taking into account his non-residency period, flow to the IT203?

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It sounds like this is all NYS source income so line 1 is correct.  What you do need to fill out is the NYC 360.1 Change of NYC residence as he owes city tax up to the move.  There is no city tax for NYC source income for non residents so he's good after the move.

I don't think allocation worksheet is necessary. 

I will think up a NJ question for you later.

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2 hours ago, Medlin Software said:

Was the work physically performed in NY, was this a remote worker, or something else?

He physically worked in NYC from 1/1/18 to 7/31/18.  He moved to Chicago, working for the same company, but worked from his Chicago home to enable him to see Chicago customers.

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41 minutes ago, Yardley CPA said:

He physically worked in NYC from 1/1/18 to 7/31/18.  He moved to Chicago, working for the same company, but worked from his Chicago home to enable him to see Chicago customers.

If the employer has a separate office (entity, at least for state taxation purposes) in IL, then the employee may be able to pay 7 months to NY and 5 to IL.  Depends on how "separate" the employer setup the two locations...

If the employer has nothing in IL, then the employee's residence/workspace became the employer's IL office.  (The employee should make sure they are covered for WC in their remote workspace, and the employer has other issues which are not a huge concern for the employee [labor posters, inspection, keeping unauthorized people out of the workspace, restricting hours, etc.].)  In the case of only a remote worker, NY will want 12 months of taxes (5 months may be as a non resident), and IL will likely want 5 months.  Which, if either, credits for paid to the other for the 5 months, I am not sure.

 

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2 minutes ago, Medlin Software said:

If the employer has a separate office (entity, at least for state taxation purposes) in IL, then the employee may be able to pay 7 months to NY and 5 to IL.  Depends on how "separate" the employer setup the two locations...

If the employer has nothing in IL, then the employee's residence/workspace became the employer's IL office.  (The employee should make sure they are covered for WC in their remote work space, and the employer has other issues which are not a huge concern for the employee.)  In the case of only a remote worker, NY will want 12 months of taxes (5 months may be as a non resident), and IL will likely want 5 months.  Which, if either, credits for paid to the other for the 5 months, I am not sure.

 

I will confirm and post my findings.  I assume that IT203B would be used to allocate that 7months vs 5months?  Thank you for chiming in.  

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33 minutes ago, Medlin Software said:

If the employer has a separate office (entity, at least for state taxation purposes) in IL, then the employee may be able to pay 7 months to NY and 5 to IL.  Depends on how "separate" the employer setup the two locations...

If the employer has nothing in IL, then the employee's residence/workspace became the employer's IL office.  (The employee should make sure they are covered for WC in their remote workspace, and the employer has other issues which are not a huge concern for the employee [labor posters, inspection, keeping unauthorized people out of the workspace, restricting hours, etc.].)  In the case of only a remote worker, NY will want 12 months of taxes (5 months may be as a non resident), and IL will likely want 5 months.  Which, if either, credits for paid to the other for the 5 months, I am not sure.

 

I've confirmed the company does have an office in Chicago.  He worked within that office from 8/1/18 through 12/31/18.

 

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Does the W-2 at the bottom state the full wages as NYC wages?  If so, ATX will automatically populate as fully earned in NYC.  To correct this (which the employer should have listed only the wages they earned while working in NYC, and then started withholding IL wages going forward), you'll have to determine how much they earned during the time in NYC vs IL.  Then on the NY IT203 worksheet, separate out what was the amount for the first months in NYC vs IL.  Same is true for the other items listed on the worksheet.  I usually have clients sum up the paychecks for the NYC months and the rest go to IL.  If they didn't withhold IL taxes, he'll probably have a hefty bill for IL, but his NYS & NYC refund will likely cover this.  image.png.fadda46c53b9af11a2fb7d0d9f5e6739.png

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FYI:  NY W-2s (and CT and other states) are required to have the federal wages listed for NY. That's the starting point for the NY return. Then you complete the worksheet to allocate for part-year situations.

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I think I see where you went astray.  The instructions say for the IT-203B to enter NYS income info for when you were a nonresident of NY.   You've entered the entire year and backed out the IL time.  I think it should be entered like this (I'm just assuming $60k earned while in IL).  You manually enter the IL wages on line 1o of the IT-203-B worksheet, then manually DELETE the Column C wages ATX flows to the Part-year Resident Income Worksheet for the NY IT-203image.png.2aee39a1adeb13246942852e5c91d28e.pngimage.png.8c69f885f7c56b25cc244dded96b27b6.pngimage.png.140bc9fdf44cf590117e00f5511fb8c3.pngimage.png.dde5efa7df1edd3c8134994258848ef0.png

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16 minutes ago, Lion EA said:

FYI:  NY W-2s (and CT and other states) are required to have the federal wages listed for NY. That's the starting point for the NY return. Then you complete the worksheet to allocate for part-year situations.

Interesting, I didn't know this.  Thanks!  

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