[Brian41252001]

:confused:

Hello,

Can someone please help me with these questions:

I live in CT and work in NY city. What are my tax obligations here? Is it true that I will have to pay, NY state tax, NY city tax as well as CT state taxes, but since I am living in CT, I will get back the NY State and city tax when filing my return?

2. My wife works in CT. Do I have to report her wages and do I have to pay NY state and city taxes on her wages too?

Please help.

Thanks.

[GlindaofOz]

Yes you will have to pay NY, NYC & CT. You will get back your non residential state taxes as they will be used against your tax liability for CT. You will not have to report your wife's wages for NY.

At tax time you will file both CT & NY returns. As you complete the form you will see that pretty much all you will have to do for NY is just put in your wages and tax you paid in NY then you just put 0 everywhere else and pull down the amount you paid.

I did the opposite for a few years I lived in NY and worked in CT.

[ebaines]

A couple of clarifications on Glinda's post:

1. You do not pay any NYC tax - the NYC commuter tax was eliminated several years back (only NYC residents have to pay NYC income tax now).

2. On the NY non-resident form you do have to report all your income - including your wife's wages (as well as other sources you may have such as dividends, interest, capital gains, etc). This is to determine your tax bracket - they put you in a bracket based on your total income, not just the NY piece.

3. After you determine your NY income tax due, you figure your CT taxes as if all your income is earned in CT, then you get a credit for the amount you paid to NY, but only to a maximum of what CT would have taxed you on your income if you had earned it in CT. For example, if you earn $100K in NY, the NY tax on that may be, say, $7K, but since CT's rates are lower you may only be allowed a credit of, say, $5K (these aren't real numbers - just illustrative). They limit the credit because otherwise CT would be subsidizing your NY tax payments. So you don't necessarily "get it back."

[AtlantaTaxExpert]

Ebaines covers it rather well AGAIN! No comment.

[Brian41252001]

Thank you so much Glinda, ebaines and Atlanta.

[AtlantaTaxExpert]

Glad to help (even though I really did not help).

[shakatah]

Ebaines, Atlanta Tax expert,

So in this scenario NYS is collecting taxes on income that is not earned in NYS, from someone who does not live in NYS? This is really a question about his wife's income... So in my case, my wife works in nyc, I work in NJ.. we both live in NJ, NYS will be collecting taxes on my income although I neither work nor live in NYS?

If the answer to that question is yes, NYS is a practicing tactics that are worse than mobsters. There have been no challenges to this?

[ebaines]

So in this scenario NYS is collecting taxes on income that is not earned in NYS, from someone who does not live in NYS? ...

If the answer to that question is yes, NYS is a practicing tactics that are worse than mobsters. There have been no challenges to this?

I'm no lawyer, but, it seems to me that NY is taxing the income earned by non-residents in exactly the same way as they would tax their own residents. As a non-resident you have to report your income earned outside of NY only for the purpose of calculating a tax rate to use on the income earnned in NY. They are really not taxing any of the money earned outside of NYS - just putting a higher tax rate on the money earned in NYS.

Whether this makes them worse than mobsters I don't know - I suppose politicians have been called worse! States do have a way of figuring out how to maximize taxes on those people who have no voting rights, in this case out-of-state commuters.

[shakatah]

so in my case.. if my wife and I file jointly.. they would not be taxing my portion of our income but would be using my portion of the income to potentially put my wife in a higher tax bracket.. thus taxing her income at a higher rate based on the "bump" that my nonresident out of state income provides.

So if she is in X tax bracket without my income and stays within X tax bracket with it.. then it would not affect us. But if adding my income moves her from X tax bracket to Y (a higher tax bracket) then her nys tax liability increases because of my (a person who does not live nor work in nys) income.

Wow.. Sweat deal for NYS.. alarmed that other states are not pressuring nys to stop this practice. I guess the people who would benefit CANNOT vote in nys anyway so it continues.


THANKS... really appreciate the education.

[ebaines]

So if she is in X tax bracket without my income and stays within X tax bracket with it..then it would not affect us. But if adding my income moves her from X tax bracket to Y (a higher tax bracket) then her nys tax liability increases because of my (a person who does not live nor work in nys) income.

Wow..Sweat deal for NYS..alarmed that other states are not pressuring nys to stop this practice. I guess the people who would benefit CANNOT vote in nys anyway so it continues.

Yes, I think you have it right.

I suppose other states don't complain because they pretty much all do the same thing - including your state of NJ! According to the NJ Treasury Dept. web site:

A nonresident's tax is computed on income from all sources (as if he or she were a New Jersey resident) and then prorated according to the ratio that New Jersey income bears to income from all sources (both inside and outside New Jersey).

In other words, just like NYS.

[AtlantaTaxExpert]

Well argued!