Discussion:NY audit - military income taxable in NY?
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Discussion Forum Index --> Tax Questions --> NY audit - military income taxable in NY?
| 7 January 2009 | |
| A client received an audit notice from New York State for 2003. They filed a joint federal return, but no New York return. As I understand their situation, the wife moved to New York from Illinois in April, 2003 to stay with some relatives while her husband was stationed overseas (he is with the Air Force). The only income that was received in 2003 was the husband's military pay. The wife did not work in NY. She left NY state in mid 2004. NY is now auditing them based on the federal return saying that all of his income is subject to NY tax. According to current NY regs, I don't believe his income should be taxable to NY, but was anything different in 2003? Or is it because the wife lived in NY, his income becomes taxable to NY? Any ideas? | |
| 7 January 2009 | |
| You need to find out what the husbands home of record is.
I had this issue in the early 1970s, but I was a New York resident when I entered the service. The law may have changed since then, but at that time I had to pay NY tax on my military income for the year of departure, since I had lived and worked in NY for part of that year. The following year I did not have to pay NY because I was out of the country for the entire year. | |
| 7 January 2009 | |
| Just got more info from the client. The husband grew up in NY, moved out in 1997 & has never lived back here ~ but he still maintains his NY driver's license. I am thinking he may still be considered a NY resident. I really need to look at NY pub 361 which is not available online due to revisions - does anyone have an old copy? All help is appreciated. | |
| 7 January 2009 | |
| Krav, if your client's home of record on his military records is New York, NY considers him still to be domiciled in New York. I have the 2007 version of Pub 361 and can e-mail it to you. Just put your e-mail address on my talk page.
He is a NY resident subject to tax on all of his income, including his military compensation, unless he meets one of the statutory exceptions that apply to all taxpayers, not just military. He is a nonresident if he (1) does not maintain a permanent place of abode in NY; (2) does maintain a permanent place of abode somewhere else; and (3) spends 30 days or less of the taxable year in NY. Also, he is a nonresident if (1) he spends at least 450 days of any 548-day period in a foreign country, (2) he spends no more than 90 days of the taxable year in NY, (3) his spouse and minor children spend no more than 90 days of the taxable year in a permanent place of abode in NY maintained by the taxpayer. Pub 361 explains how the term "permanent place of abode" applies in the military context. | |
