Hi,
I live and work in Chicago on a full-time basis. Frequently I travel to NYC for business purposes and have so for years. I am thinking about getting a small apartment in Manhattan so that my trips to NYC are more convenient than booking / staying at hotels. If I get an apartment, I would travel much more to NY than I currently do and I would expect my total days in NYC will be around 100 at most over a given year. My permanent residence is and will continue to be Chicago. I guess my question is will I be subject to the New York City tax if I do rent an apartment? And will I then be subject also to NY State tax as well?

I would appreciate some advice.
Thanks,
Chloe

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Originally Posted by Chloe23

Hi,
I live and work in Chicago on a full-time basis. Frequently I travel to NYC for business purposes and have so for years. I am thinking about getting a small apartment in Manhattan so that my trips to NYC are more convenient than booking / staying at hotels. If I get an apartment, I would travel much more to NY than I currently do and I would expect my total days in NYC will be around 100 at most over a given year. My permanent residence is and will continue to be Chicago. I guess my question is will I be subject to the New York City tax if I do rent an apartment? And will I then be subject also to NY State tax as well?

I would appreciate some advice.
Thanks,
Chloe

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There are many tax cases wherein NYC/NY have prevailed when a nexus is estsblished within the city/state. Such nexus is renting/owing real property. I imagine NYC and NYS will seek to tax you on the days worked in NYC. Credit for tax paid to NY can claimed on your Illinois return.

Agreed. Once you rent the property, you become liable for BOTH NY state and NY City income taxes. In fact, they specifically ASK on the tax form if you have rented an apartment in the state/city.

Now, it MAY be worth it to you. The savings over the hotel bills by itself may offset any taxes owed, especially when you factor in the credit you will receive on your Illinois tax return. If the credit is dollar-for-dollar, then the NYS/NYC tax issue is a wash and NOT a factor to be considered in your decision.

The tax rate in Illinois is flat 3%, whereas in NYC it's between 4% and 6.85% for the state and between 2.9% and 3.65% for the city. So you will most likely find that you can't offset all the NYC and NYS taxes against your Illinois taxes.

Ebaines makes a good point!