Question

New York State Non-Resident

Forum|Forum|1 year ago
January 26, 2025
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I filed a Non-Resident NYS tax form for 2019 as married filing jointly. At the time, we lived in NJ for the full year. I worked (at least part of the year) in New York State. My wife was unemployed and earned/received unemployment benefits from NJ, while living in NJ (full year on both accounts). Her previous employer was also in NJ.

When filing the 2019 form, I missed my wife's unemployment income on both the federal and state returns. Consequently, once the IRS shared the missing income with NYS, NYS gave me an assessment for additional taxes due. While I understand their calculation includes federal income, I cannot comprehend how I can be taxed on non-NYS income while being a NYS non-resident. The only change they are picking up is the NJ unemployment so its clear they are effectively taxes our NJ income. How can this be legal? Are there any laws that govern how states can tax? The federal income amount is a direct input into the NYS tax calculation

Appreciate any insights.

Not A Product Question

T

TomD8

You are correct that your wife's unemployment - assuming it was not derived from employment in New York - should not have been taxed by New York. The "New York amount" on Line 14 of your 2019 Form IT-203 should have been zero. (But her unemployment should be included in the Line 14 "Federal Amount" column, since you filed jointly.)

https://www.tax.ny.gov/pdf/2019/inc/it203_2019_fill_in.pdf

See the instructions for Line 14 on page 24 of the 2019 instructions:

https://www.tax.ny.gov/pdf/2019/inc/it203i_2019.pdf

If this was not the case, then you will have to contact the New York State Dept of Taxation to dispute their findings. Their contact information should be in the assessment letter you received.

**Answers are correct to the best of my ability but do not constitute tax or legal advice.

N

nmiscAuthor

Thanks for the quick response. However, that unemployment income in the federal amount on line 14, my AGI is increased so the pre-allocated NYS tax is higher. My post-allocated is also higher. Therefore, I am effectively taxed on the NJ unemployment income despite beuing a NYS non-resident for the full year. This is the case even though my NYS income allocation % is lower. Its seems this is becuase NYS has the income allocation % applied to the resulting tax (based on federal income) and not the actuall income uased for the tax base to then apply the NYS tax rate.

That does not seem right to me. Does that make sense to you?

T

TomD8

Thanks again for the quick response. I think I am misunderstanding something. Based on lines 31 through 36 on the below linked 2019 NYS tax form, it seems to me NYS taxable income is based on federal income, not income earned in NYS. That income is also used to determine your tax rate and tax due on line 38.

Only after determining the base tax (line 44), which includes non-NYS income, is there a proration. However, it still results in me owning more NYS tax (at least according to NYS) when including NJ only income. Which feels wrong. But maybe I am isunderstanding?

https://www.tax.ny.gov/pdf/2019/inc/it203_2019_fill_in.pdf

2019 NYS Non-Resident Tax Form

To explain it differently: For non-residents and part-year residents, New York first calculates your tax as if you were a full-year resident of New York. It then divides your New York income by your total income to obtain a percentage. It then applies that percentage to the full-year calculated tax to determine the tax due to NY.

**Answers are correct to the best of my ability but do not constitute tax or legal advice.