Hi all,
I work for a new york based firm so getting NY State taxes deducted from my payroll at the moment. However given the pandemic i have worked from home in another state in the DMV region. Does this mean i will be doubly taxed as I don’t see that New York has a reciprocity agreement with any state? Has anyone encountered this situation before and can help clarify?
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Depends on the specific state - you either won't file a DMV tax return at all, or you will file one and will get a credit for NY tax.
How the credit works: when you file your DMV area tax return, you will report the amount you paid to NY state and your local state taxes will be credited that amount. Since NY state will be a higher tax rate, you will pay all of your NY state tax and no DMV state tax. It's illegal for states to double tax you now, so even with no official reciprocity you still are fine.
If you're not a NYC resident, you won't pay NYC city tax, just state - so may get a slight refund there if that is being withheld.
Highly recommend you find some one man shop CPA guy who will take care of all of this for like $150. This was a simple explanation but the taxes on 2 states can get complex and it's well worth having professional advice when it's that cheap.
Thank you!!!!
You're supposed to let your employer know that you've moved states so that they withhold and remit taxes based on your new state of residence. Technically you've paid taxes to NY that you don't owe but should've been paying taxes to the state you now live in.
Someone from my firm got caught in your situation last year most likely because our VPN can see where we're located.
NY is a uniquely psycho state in that if your physical office location is there you owe them taxes no matter where you work (remotely) or reside. Other states may leave you alone on this or give you a temporary COVID exemption.
Came here to say this - NY state employers have a specific designation such that you need to pay NYS taxes regardless of residency. This doesn't apply to local tax though, so if you leave the city and change your residency, you don't have to pay the extra 3-4% in city tax
i tried doing this last summer and I had to pay NYC taxes fwiw
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