Hi,

I have a question about the tax rates in NY State.

My wife worked there for 6 months, and has an income of roughly 50k. No other income that year.

I worked in WA-state (no state income tax there) and made roughly 120k.

The instructions on the part-time resident form specifically state that we have to file MFJ in New York. OK, no problem there.

However: the tax in NY is computed on the amount of your *federal income*. Later, you compute the quotient (New York Income) / (Federal Income) to adjust this owed tax. A bit of a weird way doing things, but this is what New York State decided to do.

The problem is that our federal income is roughly 50k + 120k = 170k, and all income above 150k in New York is taxed at a flat percentage of 6.85%. The New York State tax rate is only progressive for incomes below 150k, when you make more than 150k then it suddenly becomes a flat tax.

This means that our NY-income of 50k is taxed now at a flax rate of 6.85%. This is 2% higher than you
would expect for an income of 50k, and it means that we have to pay a few hundred bucks to NY.

The entire system sounds a bit unfair to me. Do I miss something, or is this really just the way it works?

Thanks!

I think your understanding is accurate. You are put into a tax bracket commensurate with your total income, not just the NY portion, just as if you both worked there. I suppose it's an easy way for them to get the most from tax payers who can't vote them out of office (non-residents like yourself), without running afoul of the constitution.

Actually the NY brackets max out at 6.85% with a joint income of "just" $40K.

One other point - not to add to your misery, but if your wife lived during those 6 months in either NYC or Yonkers you have even more to pay.