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NYC 1127

 
 
Drew Edmundson
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      06-02-2006, 06:53 AM
I am preparing my first NYC 1127 for a nonresident employee
of NY City. Taxpayer retired last summer so he was only a
nonresident employee of NYC for part of the year.

In looking at the instructions I see the following for
partial-year employees: "If you were a New York City
employee for part of 2005, you must report that portion of
federal items of income and deduction which is attributable
to your period of employment by the City of New York."

As those that are familiar with the form know there are two
columns - the federal amount column and the Section 1127
Employee column. For full year nonresident employees all
the joint income from the federal is reported in the federal
column and all the nonresident NYC employee's federal income
is reported in the Section 1127 column. (Although there is
an option to report just the separate income in the federal
column.)

So when the instructions say to report the federal portion
attributable to your NYC employment period do they mean to
do this for both columns or only for the Section 1127
column?

TIA,

---
Drew Edmundson, CPA
Cary, NC

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Katie
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      06-03-2006, 02:03 PM
Drew Edmundson wrote:

> I am preparing my first NYC 1127 for a nonresident employee
> of NY City. Taxpayer retired last summer so he was only a
> nonresident employee of NYC for part of the year.
>
> In looking at the instructions I see the following for
> partial-year employees: "If you were a New York City
> employee for part of 2005, you must report that portion of
> federal items of income and deduction which is attributable
> to your period of employment by the City of New York."
>
> As those that are familiar with the form know there are two
> columns - the federal amount column and the Section 1127
> Employee column. For full year nonresident employees all
> the joint income from the federal is reported in the federal
> column and all the nonresident NYC employee's federal income
> is reported in the Section 1127 column. (Although there is
> an option to report just the separate income in the federal
> column.)
>
> So when the instructions say to report the federal portion
> attributable to your NYC employment period do they mean to
> do this for both columns or only for the Section 1127
> column?


Drew, I haven't spent a lot of time looking at the forms,
but I see the ambiguity you reference in the instructions.
The point of this exercise, if I understand it, is to
calculate the amount of tax the employee would have paid to
the city if he/she had been a city resident while employed
by the city. So he is treated as if he had been a part-year
resident of the city in this case. The result should be the
same as if you had completed an IT-203 part-year resident
return for the employee, assuming he was a resident during
the part of the year when he was a city employee. So -- I
think the answer to the question is that 100% of the federal
income goes in Col. A., and only the federal income relating
to the period of employment goes in Col. B. You calculate
the tax as if the taxpayer had been a full-year resident,
and then prorate by the ratio of NYC AGI (Col. B) to total
AGI (Col. A).

If the employee had actually filed an IT 203 and paid tax to
the city, the tax paid would be subtracted from the amount
due on the NYC 1127.

You might try doing a pro forma IT 203, based on the
assumption of state and city residence during the period of
employment, just to verify your results.

Katie in San Diego

<< ================================================== ===== >>
<< The foregoing is intended for educational purposes only >>
<< and does NOT constitute legal OR professional advice. >>
<< >>
<< The Charter and the Guidelines for submitting >>
<< messages to this newsgroup are at www.asktax.org. >>
<< Copyright (2006) - All rights reserved. >>
<< ================================================== ===== >>
 
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Drew Edmundson
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      06-06-2006, 11:29 AM
Katie" <(E-Mail Removed)> wrote:

snip

> Drew, I haven't spent a lot of time looking at the forms,
> but I see the ambiguity you reference in the instructions.
> The point of this exercise, if I understand it, is to
> calculate the amount of tax the employee would have paid to
> the city if he/she had been a city resident while employed
> by the city. So he is treated as if he had been a part-year
> resident of the city in this case. The result should be the
> same as if you had completed an IT-203 part-year resident
> return for the employee, assuming he was a resident during
> the part of the year when he was a city employee. So -- I
> think the answer to the question is that 100% of the federal
> income goes in Col. A., and only the federal income relating
> to the period of employment goes in Col. B. You calculate
> the tax as if the taxpayer had been a full-year resident,
> and then prorate by the ratio of NYC AGI (Col. B) to total
> AGI (Col. A).


Katie, thank you. I posted this back in late March but it
never showed up. A second try actually made it to the group
on 3-30-06. Anyway I prepared the form in the manner you
described as I could never get anyone on the phone in NY
City.

---
Drew Edmundson, CPA
Cary, NC

<< ================================================== ===== >>
<< The foregoing is intended for educational purposes only >>
<< and does NOT constitute legal OR professional advice. >>
<< >>
<< The Charter and the Guidelines for submitting >>
<< messages to this newsgroup are at www.asktax.org. >>
<< Copyright (2006) - All rights reserved. >>
<< ================================================== ===== >>
 
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