Hi All,

I'm currently filing my NY state and city taxes, and it says that the state/city wages are only for services rendered within the state. Since I didn't actually work for the sign-on bonus (which was mailed to me outside of New York before I even started work with the company), can I deduct this from the City and State Gross income (i.e. Line 1 Column 2 on IT203 and Line1 Column B in IT 360)?

Here's some info on my W2:
Box 16 displays X dollars, where X = amount in Box 1, i.e. Fed wages while Box 18 displays (X-SB) dollars, where SB = sign-on bonus.

(Aside: On the instructions for the IT-203 form, it says that my state wages may not be necessarily equal to what's in Box 16.)

So, which of the following are allowed?

1) Use (X-SB) for both State and City Gross income (Line 1)
2) Use X for state and SB for City as suggested on W2
3) Use X for both State and City because there is a mistake on W2.

Thanks in advance for your help!

AtlantaTaxExpert

Based on the information provided, you will have to pay state taxes on the signing bonus, but NOT NYC taxes.

If you do NOT pay NY state taxes on the signing bonus, you will have to pay state taxes for the state in which you lived BEFORE coming to NY state, and provide a copy of THAT state tax return to NY state to show them that you did pay those taxes to the OTHER state.

johnwang9999

thanks for prompt reply.

that's what i figured from the data given. although i'm still trying to figure out the rationale behind how state/city figures this stuff.
NYS considers sign-on bonus something that i "worked" for while NYC considers it "free" money. so if california state (where i received the bonus) or any other state for that matter considers it "free" money, then one can in theory file it in that state and get away with paying no taxes on the bonus. is that right?

MukatA

I just want to add that you can deduct moving expenses on Form 3903. This is available as adjustment and you do not need to itemized the deductions.
Read: Your U.S. Tax Return: Moving Expenses

johnwang9999

MukatA: thanks! i did not know that. i can even file that as a non-resident. cool!