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jhagerman · Jan 3, 2009, 12:52 PM

I just got audited by the state of NY on taxes paid in 2004.

I became a full time student in 2004 at Columbia and moved there after working in MS from Jan 1-Aug 1 2004. My wife, however, continued working in MS while I started school and didn't move to NYC until Nov 2004. She worked in MS from Jan 1-Aug 30.

Neither of us were employed in NY during 2004, nor did we continue working for our MS jobs while living in NYC. Now, NY state wants us to pay income tax on the income we earned in MS. I believe we are part-time residents in NYC and did not earn any income in NYC, but we failed to file a return to that effect -- probably causing the audit now.

My question is, am I right in thinking we don't owe any NY income tax, and is there a penalty for not filing a return when you didn't owe anything? Thanks.

MukatA · Jan 5, 2009, 12:31 AM

If you earned any income while in NY, then you must report this on NY tax return. If on that income you paid taxes in any other state you will claim credit on NY return.

If you were in NY for part year in 2004 and did not earn any income anywhere during this period, your do not pay any tax in NY. You should explain this to NY.
You should also consult AtlantaTaxExpert at [email protected]

AtlantaTaxExpert · Jan 7, 2009, 01:18 AM

MukatA is correct; you do NOT owe taxes on income NOT earned within the NY state borders.

That said, NY state tax authorities will want that MS salary accounted for, which you can do by proving them with a photocopy of your 2004 Mississippi tax return.

JimNYC · Mar 13, 2011, 07:22 PM

Above is incorrect. Income earned outside of NYS/NYC is still considered taxable in NYS/NYC if you are a resident of NYS/NYC during the time it was earned. Any income tax withheld in the other state is offset against the NYS/NYC tax liability. There are however adjustments for part period residents, and in your case, none of that income was earned while you were a NYS/NYC resident. If your wife was still earning money while you were a NYS/NYC resident (even if only for 1 month), then that IS liable to NYS/NYC tax, IF you file a joint return. You need to show records of income and filings in the other state, proof of start of residency in NYS/NYC, and even though there may be no income tax due, you can still file a nil return. You are correct - IF there is no liability, NYS/NYC can not charge a penalty.

AtlantaTaxExpert · Mar 14, 2011, 10:46 AM

I take exception to your comment that "Above is incorrect".

As clearly noted by both MukatA and myself, the income in question was earned while both the OP and his spouse were clearly residents of Mississippi. Neither NY state nor New York City would have ANY legal standing to claim tax jurisdiction over the Mississippi income once these facts were made clear. That is why I suggested he provide a copy of the Mississippi tax return.

Further, since the OP is a full-time college student, BY LAW, visiting college students are granted non-resident status to BOTH NY state and NYC while they attend college within the state borders and city limits. NY state could claim tax jurisdiction ONLY on income earned within the state borders, and NYC could claim NOT tax jurisdiction while the OP was a full-time undergraduate student at Columbia.