New York non-resident tax withholdings

July 27, 2023 5:26 AM

I am a non-resident working variable, part-time hours for an organization in NYC. Presumably I will owe NYS and NYC taxes. How do I ensure that I have sufficient withholdings to cover my tax liability? (Yes, I have an accountant. Who is not licensed in NY and cannot advise me.) I will make less than $10k at this job - does it even make sense to have tax withheld, or should I just pay up when I file? Help.
posted by epanalepsis to Work & Money (9 answers total)

the company paying you should be withholding NYS tax from your paycheck already. The trick here is to get the state you’re a resident of to credit you for the taxes paid in new york. It was easy enough for me in Wisconsin but it’s different for every state. If your paychecks have withholding for your own state, ask the business folks at the company if they’re reporting you to NY or not. if they’re not you might not need to do anything. If they’re not withholding anything for tax then i’d also ask them what’s going on.
posted by dis_integration at 6:26 AM on July 27, 2023

If you are working remotely, no you will not owe NY non resident taxes.

If you work in NY even one day then you will. NY is very strict about that.
posted by ananci at 6:28 AM on July 27, 2023 [1 favorite]

Where are you doing the work - physically, in which state are you located?
posted by neutralhydrogen at 6:28 AM on July 27, 2023

> If you are working remotely, no you will not owe NY non resident taxes.

This isn't true anymore. They changed the convenience rule in 2021 and it hit me, who hasn't stepped foot in NYS since 2019.
posted by dis_integration at 7:06 AM on July 27, 2023 [1 favorite]

In my experience, tax preparers can handle multiple state filings without regard to being licensed in a particular state. This is important because, as noted above, what you pay in one state can affect what you pay in another state. Put another way - people with filings in multiple states do not typically hire preparers in each state - they have one preparer who does all the states. You need a new CPA/preparer.
posted by Mid at 7:10 AM on July 27, 2023 [4 favorites]

Best answer: I don't know if you need a new preparer - I've handled this with very basic tax software (made ~$10K in California, live in Massachusetts, filed state returns for both states and got appropriate refunds). I'd go ahead and let your employer withhold.
posted by mskyle at 7:20 AM on July 27, 2023 [1 favorite]

I'd look to see if there's a "threshold amount earned" [EDIT - the quote marks are for emphasis, not an official term for googling] you have to meet before you even owe NYC or NYS taxes. If you'll make $10,000 in a year, total - it's pure speculation on my part - but will you even owe taxes on it?
posted by vitabellosi at 7:21 AM on July 27, 2023

Best answer: I think you will owe NYS taxes but not NYC taxes, which are specifically for residents and unrelated to where the employer is based.
posted by staggernation at 7:24 AM on July 27, 2023 [4 favorites]

I have just skimmed the NYS part year/non resident tax form (called IT-203) and the calculation looks similar to what is done in California which I am very familiar with. Both states have progressive tax rates.

This is how your tax will be calculated: first they will take your total federally taxable income from your 1040. Then they will make additions and subtractions based on their state-specific tax code. The total effective tax will be computed based on this amount (you do not owe this much).

Then, this total tax rate will be applied to your NYS income.

So if you have sources of income that are not taxable in NYS, your employers default withholding likely won't cover that amount. Because they will think you are being taxed at a lower effective rate, looking at just your NYC income.

You can go through this NYS tax form using your federal tax return from last year to see how much state tax you may owe. You can also use tax software from last year.
posted by muddgirl at 9:45 AM on July 27, 2023