Discussion:TP's home is in CA but works in NY

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Discussion Forum Index --> Tax Questions --> TP's home is in CA but works in NY


Lalva (talk|edits) said:

18 April 2007
TP lives in CA, where his wife lives and work. He works in NYC and comes and goes back to CA. He has income from a CA company and from some NYC companies. I think that he should file CA return, but how about NY return? Should I file part-year resident for both states? He mantained a home in CA the whole year, and work basically in NYC the whole year.

Any thoughts and help would be really appreciated.

RSRAGENCY (talk|edits) said:

18 April 2007
His primary residence would be CA...so, you will file CA Residence, and NY non-resident...

DZCPA (talk|edits) said:

18 April 2007
Add away from home expenses to form 2106 if they apply. Watch out for New York City or Yonkers tax returns sometimes due in New York.

Lalva (talk|edits) said:

18 April 2007
Oh, please don't tell me that I have to prepare four returns (fed, CA, NY, NYC).

I think that there is a credit for taxes paid to another state. So taxes paid in NY are credited in CA, Is that right?

Thank you all.

RSRAGENCY (talk|edits) said:

18 April 2007
Yes, do the NY first, then the CA....IF you need to do the NYC, answer the questions on the info worksheet.....NYC figures will flow into place...check the W2 for Local/City taxes...it will tell you if there were City taxes withheld...

KatieJ (talk|edits) said:

18 April 2007
Your client may be a nonresident of California, even though his domicile is here and his wife is a resident. If he has been or will be absent from California for an uninterrupted period of 546 days on an employment-related contract, he is a nonresident unless he has intangible income in excess of $200,000 or his absence is primarily for tax avoidance. His absence is considered "uninterrupted" if he did not spend more than 45 days of the taxable year in California (partial days count).

If he maintains a permanent place of abode (e.g., an apartment) in NYC, spent more than 183 days of the taxable year there, he's a resident of NY and NYC, unless he can show that his employment there is temporary rather than indefinite (and therefore his "place of abode" is not "permanent.") BTW, unless his employment there IS temporary, of course he does not have "away from home" living expenses because NYC is his tax home.

So your client's situation is pretty complicated, and it's impossible to determine his residence status without a lot more information. If he is a CA resident, CA will give him credit for the tax he pays to NY on his NY earnings; CA will not give him credit for any tax he pays to NY on CA source income, which includes any income from intangibles (interest, dividends, gain/loss on sale of intangibles, etc.). If he's a NY resident, NY will give him credit for the tax he pays to CA on any CA source income (e.g., his community 1/2 of his wife's CA earnings) but not for any tax on income from intangibles (which, by NY's lights, is NY source income to a NY resident).

If he is a nonresident of NY/NYC, he is not subject to NYC tax. The NYC nonresident earnings tax was repealed in 1999.

Dennis (talk|edits) said:

18 April 2007
Sure sounds like New York resident to me. New York will allow a married separate return in a case like this and I tend to doubt community income would be included. (I can't see it as a deduction, either)

KatieJ (talk|edits) said:

18 April 2007
Well, separate property states often do require a resident to include the community 1/2 of the earned income of a spouse domiciled in a community property state in taxable income. See, e.g., Keller v. Dept. of Revenue, Oregon Tax Court, No. 1394, 9 OTR 67 (1981). However, NY probably wouldn't get excited about it because of the operation of the credit, unless the CP state involved was a no-tax state like Washington, Texas, or Nevada. (Keller was a Washington resident.) The California tax could be more than the NY tax, so the credit would wipe out the NY tax liability on that income.

Sounds like a NY resident to me too, but it depends on the facts. The NY regs provide that "a place of abode, whether in New York State or elsewhere, is not deemed permanent if it is maintained only during a temporary stay for the accomplishment of a particular purpose." 20 NYCRR 105.20(e)(1). The DOR defines a "temporary" stay as three years or less (Petition of RAANAN EINAV, DTA/ALJ, Dkt No. 820645, 03/01/2007). So he COULD be a nonresident.

He could also be a nonresident of California under the safe harbor rule. In fact, it looks to me like it's possible that he's a nonresident of BOTH states under the special rules of each of them, at the same time. Which means he's not a resident anywhere -- which certainly can happen. Not likely, mind you, but possible.

Lalva (talk|edits) said:

18 April 2007
Oh my! The wife gave me the papers saying that her husband's return was very straight forward...

Lalva (talk|edits) said:

18 April 2007
Thank you so much all of you who replied! This stuff is complicated!!

Blrgcpa (talk|edits) said:

18 April 2007
There is no NYC tax return because it's part of the NYS return. You'd file an IT-203. I don't know if you will need a 360.1 or any other additions to it.

You have to do the non-resident state first. The resident state will give a credit for taxes paid to NY.

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