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R. Klein, EA
R. Klein, EA, Enrolled Agent
Category: Tax
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Experience:  Over 20 Years experience
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I live in VA (for the past 12 years). However, Im a consultant

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I live in VA (for the past 12 years). However, I'm a consultant and work in multiple states.

I worked in NY for 2 weeks (80 hours) and from home for the NY client for 80 hours. I worked in Colorado or from home for the Colorado client for the rest of the year.

All my earnings, from all states, are showing up in the State box on my NY W2. My accountant is telling me that I will need to pay NY state income tax on all my earnings even though I only worked in NY for 80 hours. Oh, but I will get a refund of my VA state taxes. (Hurray - she said sarcastically.)

I say this is hogwash! Talk about taxation without representation! Can't I file NY form IT-203 and only pay taxes on the wages actually earned while working in NY?

HELP!!

Randalltax :

Thanks for your question today.

Randalltax :

Based on the way NY state does its tax returns, the W-2s are correct, But you do not pay tax to NY on 100% of your income, only your pro-rata share.

Randalltax :

You will need to do a NY NON-RESIDENT return.

Randalltax :

That return calculates the NY portion of your tax by first calculating the NY tax on 100% of your federal income.

Randalltax :

Then you calculate the portion of time you spent in NY State. You apply that portion to the NY tax amount, This is different than applying it first to the income income amount.

Randalltax :

So if you 100% of your income yields a NY state tax of $5000 and you worked there 2/52 of the year = 3.8%, then you multiply the $5000 state tax by 3.8%

Randalltax :

VA will also tax also your income as a resident.

Customer:

Is that the IT-203, non-resident form?

Randalltax :

VA will give you a credit for income tax paid to NY and other states to reduce the double taxation.

Randalltax :

Yes IT203

Customer:

what about the hours I worked from home for the NY client? should I include those in the NY %?

Randalltax :

Only time physically in NY State is considered for NY

Customer:

also, I have timesheets with the exact hours worked in NY. can I just multiply those hours by my rate to get the NY wages?

Randalltax :

NY does not ask for hours; it ask for days in the state

Customer:

ok, thanks

Customer:

Big relief. The accountant was showing that I owed NY $8,000 in taxes for 80 hours of work!!!

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