NYC / NY State Taxes for 2020 - Should You Change Your Biweekly Payroll Withholdings to New State?

Associate 3 in PE - LBOs

It seems more likely than not people will be not filing as NYC / NY state residents for this coming tax year. There are some arguments regarding definition of domicile that may lead to a judgement call but ignoring whether or not you are making that decision, my question is - are people changing the biweekly payroll withholdings to their new home state (i.e. you moved to Virginia from NYC), and how does this impact the period when we file next April? Is it better to just continue paying NYC/NYS then request a 100% refund and pay 100% of your new state taxes as two separate steps, or better to switch mid-year and get a refund of ~50% of NYC/NYS and from now onwards pay state taxes for the remainder of 2020.

Curious people's thoughts on logistically if that makes a difference, if any.

Comments (6)

Jul 6, 2020



Jul 31, 2020


Jul 31, 2020

There are a TON of arcane rules about doing this. PLEASE don't get a recommendation here, especially since NYS is notorious for enforcement of residency laws. We're talking keeping receipts for time not in NYS and whatnot (good luck there in quarantine) Talk to a professional in NYS tax law. It's a PITA. My NYS out of state tax return took me >10X longer to file than my federal despite just saying that everything I made was earned in NY, and tax me on it.

  • Associate 3 in PE - LBOs
Jul 31, 2020

I tend to think people over-exagerate how complex taxes are. Turbotax et al have made filing taxes pretty much as simple as it can get, and they ask you all the same questions that an accountant would but it costs $100 instead of $500. It's just technology replacing old human-jobs.

Regarding your point - there aren't that many arcane rules. There is the fact that New York State collecting taxes on your income earned in NY if you are working out of your own convenience in another state, and then the question of is New York City going to come after your wages due to you claiming yourself as a non-resident of the City.

The former is relatively straight forward though there may be some debate on if you can try get out of the state side of taxes (you were not working away from NY due to convenience but out of necessity due to COVID...though it gets complicated because local regulations did reopen ability to go back into work June/July but firms are not fully bringing people back yet). I generally think you will be liable for NYS taxes no matter what.

The latter on if you are not a resident of NYC and thus not required to pay NYC taxes is relatively straight forward if you can show your domicile wasn't NYC. This is the question most people want to know - should they stop withholding and claim back a large chunk of their city taxes paid as they file as a non-NYC resident for 2020. It's pretty easy to prove where you lived - seamless receipts, amazon shipments, getting a new state driver's license, enrolling your kid in a new school, not paying rent / utilities on a NYC address etc. all go towards that.

    • 1
Jul 31, 2020

Respectfully, Proving non-residency in NYS/NYC is a nightmare. I have this direct from the Head of Tax at Betterment, who's a friend.

As to the actual calculation: it's easy. Figuring it out took maybe four minutes. Dealing with that D*mn form that they can't even get to work right for out of state residents took almost two hours. this is with tons of documentation.

I'm just saying not to half-ass this. If you want to push it, go hard, and assume that you're assumed guilty until proven innocent.

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  • Associate 3 in PE - LBOs
Aug 1, 2020