Dear XXXXXXX,

Because you are on cash accounting, You are taxed based on when you constructively received the bonus, in the year constructively received.

If you received it in a lump sum during 2009, then you will be taxed on it in 2009.

If you received half in 2009, and half in 2010, then you would be taxed accordingly.

http://www.irs.gov/pub/irs-pdf/p538.pdf

it is taxed based on where it was earned. If you received the money for work performed in NY, then it is subject to NY tax. Because you are also a resident of CT, CT will require a return as well. You are given credit for taxes paid to NY. So CT taxes would be little or nothing additional.

This is because NY and CT do not have a reciprocal state income tax agreement.

Dear XXXXXXX,

New york taxes you on your adjusted gross income, as shown on line 36 of the state return, in your case, part year or non-resident return found at this link: http://www.tax.state.ny.us/pdf/2008/fillin/inc/it203_2008_fill_in.pdf

New YOrk starts with the Federal Adjusted Gross Income from the Federal 1040, and makes additions and subtractions to arrive at teh line 36 figure on which they will tax you.

NY has tax brackets, and you pay a percentage of income based on line 36.

The NY tax brackets are:

If your income range is between $0 and $8,000, your tax rate on every dollar of income earned is 4%.

If your income range is between $8,001 and $11,000, your tax rate on every dollar of income earned is 4.5%.

If your income range is between $11,001 and $13,000, your tax rate on every dollar of income earned is 5.25%.

If your income range is between $13,001 and $20,000, your tax rate on every dollar of income earned is 5.9%.

If your income range is $20,001 and over, your tax rate on every dollar of income earned is 6.85%.