Multi State Returns

Question

I'm having some issues filing a NY and CT return.

TP was living and working in NY until 8.18.2018 then moved to CT where she began living and commuting to NY to work, sometimes working from home (convenience so not CT sourced income).

1) I cannot get the withholding to pull through onto the NY tax return. All her income is NY sourced and currently it is showing as $0 withholding and a large liability but she should actually show a refund.

2) CT is showing my taxpayer as being a part year resident. She changed her legal residence to CT in August but spent <183 days in CT during the year and she is not domiciled to CT. From what I read I need to allocate her residence period earnings to CT (18.8.2018) and then claim credit for NY taxes paid. Ok I understand this but I cannot, even following the Intuit vids, allocate wages as double taxed without reducing the NY allocation or increasing the Federal amount...….what am I missing?!?! I'm completely baffled because there is not much input on the State Income screen 50 is greyed out.

Please help. Thanks.

itonewbie · Accepted Answer

@SEtaxpros wrote:...So ultimately she will have a CT liability on those telecommuting days.In Lacerte - I will need to subtract all income related to NY workdays as an adjustment to the Federal AGI leaving in her CT telecommuting days.  The NY return will have the whole income amount with no wage allocation to CT.Any idea why the NY withholding will not be pulling through to the State return?...Your first statement above is correct.  But what are you trying to do with the following two statements?  And what NY tax are you trying to pull through to the CT return and for what purpose?If your client had actual NY workdays, I can see a credit being claimed on the CT return for those particular days but you will need to manually override NY source income subject to CT tax and the related NY tax liability on the input screen for other state tax because Lacerte will otherwise consider the full amount to be eligible for credit.

itonewbie · Answer

Take a look at the technical discussion in a recent thread. Your client is kinda in a bind.

CT changed it's law about two years ago to tax only NR telecommuters from the states that apply the so-called convenience of the employer rule as a **bleep**-for-tat strategy. They did not, however, change their regulations on other state tax credit to source their own residents' telecommuting compensation to their employers' state so as to allow credits to be claimed. This means residents of CT telecommuting with a NY employer but not for the convenience of the employer can only claim credits on the CT return for actual workdays they have in NY but not the telecommuting days in CT.

https://proconnect.intuit.com/community/proconnect-tax-online-discussions/discussion/re-client-works-for-ny-company-but-is-ca-resident-and-does-not/01/78208#M6055

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