Severance & NJ/NY State Taxes


J

John W.

I have a question that maybe someone can answer.

I was working for BofA in 2002 in NY state. I got laid off
and went off payroll on 12/15/2002. So I was "officially" no
longer employed by the bank. The bank did not pay my
severance until January of 2003 and NY state taxes were
taken out for whatever reason. I live in NJ. I did not work
in the state of NY AT ALL in 2003. I worked in NJ in all of
2003.

My question is do I have to file a NY State Income Tax
return for 2003? NY state seems to think so as I have been
receiving the materials for the return. Is NY state going to
want a piece of my NJ income?

Any info is greatly appreciated.

Thanks.
 
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B

Benjamin Yazersky CPA

John W. said:
I have a question that maybe someone can answer.

I was working for BofA in 2002 in NY state. I got laid off
and went off payroll on 12/15/2002. So I was "officially" no
longer employed by the bank. The bank did not pay my
severance until January of 2003 and NY state taxes were
taken out for whatever reason. I live in NJ. I did not work
in the state of NY AT ALL in 2003. I worked in NJ in all of
2003.

My question is do I have to file a NY State Income Tax
return for 2003? NY state seems to think so as I have been
receiving the materials for the return. Is NY state going to
want a piece of my NJ income?
You were employed by a NY employer. So NY would consider
the unemployment NY sourced. You won't get a credit on your
NJ return for the NY tax on this items, because NJ doesn't
tax unemployment. The NJ credit for taxes paid to other
states is for dually taxed income.

NY, like most states sends out tax forms and related
materials based on what you filed in the previous year. That
has no bearing on what you need to file this year.
 
A

A.G. Kalman

John said:
I have a question that maybe someone can answer.

I was working for BofA in 2002 in NY state. I got laid off
and went off payroll on 12/15/2002. So I was "officially" no
longer employed by the bank. The bank did not pay my
severance until January of 2003 and NY state taxes were
taken out for whatever reason. I live in NJ. I did not work
in the state of NY AT ALL in 2003. I worked in NJ in all of
2003.

My question is do I have to file a NY State Income Tax
return for 2003? NY state seems to think so as I have been
receiving the materials for the return. Is NY state going to
want a piece of my NJ income?
The severance was earned in NY. It doesn't matter that the
company waited until 2003 to cut the check. It is taxable by
NY. I would also assume the company withheld NY taxes and
not NJ taxes.
 
D

Dannie

John W. said:
I have a question that maybe someone can answer.

I was working for BofA in 2002 in NY state. I got laid off
and went off payroll on 12/15/2002. So I was "officially" no
longer employed by the bank. The bank did not pay my
severance until January of 2003 and NY state taxes were
taken out for whatever reason. I live in NJ. I did not work
in the state of NY AT ALL in 2003. I worked in NJ in all of
2003.

My question is do I have to file a NY State Income Tax
return for 2003? NY state seems to think so as I have been
receiving the materials for the return. Is NY state going to
want a piece of my NJ income?
What forms did you fill out for 2002? IT-203? NJ -1040R?
 
A

Arthur L. Rubin

John said:
I have a question that maybe someone can answer.

I was working for BofA in 2002 in NY state. I got laid off
and went off payroll on 12/15/2002. So I was "officially" no
longer employed by the bank. The bank did not pay my
severance until January of 2003 and NY state taxes were
taken out for whatever reason. I live in NJ. I did not work
in the state of NY AT ALL in 2003. I worked in NJ in all of
2003.

My question is do I have to file a NY State Income Tax
return for 2003?
Yes -- severance pay is NY source income, even if
unemployment compensation is not considered "sourced"
by AZ.
NY state seems to think so as I have been
receiving the materials for the return.
They're sending you materials because you filed a NY
return last year. They don't NECESSARILY know whether
you have to file a return.
Is NY state going to
want a piece of my NJ income?
Of course! Whether they're entitled to it is another question.

Seriously, you have to file a NY non-resident return. If
NY is anything like the states I'm familiar with, you'll
report all of your income (modified for NY taxability,
but not for source), calculate NY tax on that amount,
and pay the proportion of that tax that your NY source
income takes to the total.

You may get a credit on your NJ income tax for up to
that amount, depending on the relative NJ and NY
income tax rates.
 
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J

John W.

Thanks for the info so far.

Ok, so I have to file a NY state tax return for my
severance. NY state taxes have already been taken out of my
severance.

But in regards to the entirety of my NJ income earned in
2003, is NY going to want taxes on my NJ wages in addition
to what they took out for my severance? So why would NY be
entiteled to any taxes on any NJ income if I did not work in
NY at all in 2003?

Thanks.
 
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