[lynalucard]

Hi,

My background: I was on H1B visa and lived in New York City the entire 2015

I am very confused whether I have to file New York State tax as a resident.

According to the NY state website Income tax definitions:

You're a New York State resident for income tax purposes if:Your domicile is New York State (see Exception below); or
Your domicile is not New York State but you maintain a permanent place
Of abode in New York State for more than 11 months of the year and
Spend 184 days or more in New York State during the tax year.

Your domicile is:
The place you intend to have as your permanent home
Where your permanent home is located
The place you intend to return to after being away (as on vacation,
Business assignments, educational leave, or military assignment

I don't think my domicile is NYS because I am not a permanent resident. My domicile should be my home country. Besides, I moved to a new apartment in June so I didn't maintain a permanent place Of abode more than 11 months in 2015.

Do I have to file tax as a NYS resident? I will get all my city tax refunded if I don't.

Thank you.

[AtlantaTaxExpert]

Yes, you ARE a New York state resident, and, if you live in NY CITY for all of 2015, you are also a NYC resident for 2015, which means you are liable for BOTH NY state AND NY City income taxes.

[lynalucard]

Hi AtlantaTaxExpert, thank you for your reply. My understanding is still my domicile is not NEW YORK STATE so I should not be considered as a NEW YORK STATE resident for tax purpose. If I file tax as NON New York State Resident, what will be the worst consequence? Getting audited and potentially paying tax Penalty? How much penalty will I pay?

[AtlantaTaxExpert]

If you show a NYC address, your chances of getting audited when you claim NON-NYC residence is virtually 100%, and you will have no defense, because your own address defines your residency.

[lynalucard]

I filed as a non NYS resident last year but I didn't get audited. (I was on OPT and H1B last year) I assume New York Tax Department has no idea about my visa status.) I used my foreign permanent address to fill out the state tax return form.

[AtlantaTaxExpert]

The fact that you were ib OPT saved you. The NY state tax department can and does access the USCIS database to determine your visa status.

[ebaines]

You are misinterpreting the domicile description. Your domicile is NY City, based on the fact that NYC is where you live and work. You haven't said why you live there or whether it's temporary. I assume you have a job in the city (i.e. you are not there for some temporary reason like a short-term job assignment, right?). A quick rule of thumb is that for tax reasons you're principal domicile is almost always the place where you spend the most time. And it is often reinforced by factors like where your car is registered, where you have your mail sent, the address on record with your employer, etc. There are exceptions for temporary situations like attending college and short tem work assignments, but none of those exceptions seem to apply to you. And especially if your employer issues a W2 form with a NYC address, you can be assured that the NYC tax authorities will notice. It might take a year or two for them to catch up, but eventually they will.

[AtlantaTaxExpert]

ebaines,

Persons on a F-1 visa (for international students) and on Optional Practical Training (OPT) fall into a special category. They are non-resident aliens and, under New York tax law, are considered to be NON-residents of the state even though they live and work in the New York City. This being the case, they are NOT considered to NYC residents as well.

Now, an argument can be made that the OP lost this status when he converted to the H-1B visa, which is a work visa. However, at worst, he would be considered only a part-year resident of NYC.

But you are right, the NY state tax authorities and eventually contact him about this issue. All he need do is provide a copy of his visas, and they will re-calculate his status as a part-year resident starting on the date of his H-1B visa, which is likely 1 October.

[lynalucard]

Hi ebaines, I really appreciate you taking the time to reply me. My point is H-1B is still a temporary visa. (only valid for 3 years) If I lose my job, I will be forced to leave the country immediately so do you still think my domicile is NYC? Even my New York State driver licence indicates that I am a temp visitor expires XX/XX/20XX.

You are misinterpreting the domicile description. Your domicile is NY City, based on the fact that NYC is where you live and work. You haven't said why you live there or whether it's temporary. I assume you have a job in the city (i.e. you are not there for some temporary reason like a short-term job assignment, right?). A quick rule of thumb is that for tax reasons you're principal domicile is almost always the place where you spend the most time. And it is often reinforced by factors like where your car is registered, where you have your mail sent, the address on record with your employer, etc. There are exceptions for temporary situations like attending college and short tem work assignments, but none of those exceptions seem to apply to you. And especially if your employer issues a W2 form with a NYC address, you can be assured that the NYC tax authorities will notice. It might take a year or two for them to catch up, but eventually they will.

[AtlantaTaxExpert]

Once you convert to the H-1B visa, your status becomes that of a resident alien, which means you are taxed just like a U.S. citizen, even if your visa is a temporary one.

[lynalucard]

Hi AtlantaTaxExpert,

I understand that it will be risky for me to file tax as a non resident. But I am very curious about what will the worst consequence be if I get contacted by the state tax authorities? I am willing to hire a tax lawyer. It is New York State's fault for not clarifying the definition of "resident". How am I supposed to know being on OPT and H1B are treated differently?

ebaines,

Persons on a F-1 visa (for international students) and on Optional Practical Training (OPT) fall into a special category. They are non-resident aliens and, under New York tax law, are considered to be NON-residents of the state even though they live and work in the New York City. This being the case, they are NOT considered to NYC residents as well.

Now, an argument can be made that the OP lost this status when he converted to the H-1B visa, which is a work visa. However, at worst, he would be considered only a part-year resident of NYC.

But you are right, the NY state tax authorities and eventually contact him about this issue. All he need do is provide a copy of his visas, and they will re-calculate his status as a part-year resident starting on the date of his H-1B visa, which is likely 1 October.

[AtlantaTaxExpert]

The states and the courts have consistently said that ignorance of the law is NOT an excuse. There are plenty of people like me, and forums like this one, to get the information you need.