Allocate NY income by percentage still results in 100% for NY

Forum|Forum|1 year ago
February 17, 2025
2 replies
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In my W2 I have state income in CA and the state income for NY is actually the total (box 1).

I'm filing on turbotax and allocating income to NY.

I go to allocate by %, aiming to put 28% for NY since the income for CA is 72% of the total income for the year.

However, after I write 28, turbotax still sets NY state income to the total for the year.

What's going on?

THANKS

TurboTax Premier Online

KeshaH

To best understand the issue, I'd like to view a diagnostic copy of your return. With it, we can take a look at your return so we can see exactly what you see and help come to a resolution. The return will be scrubbed and will not include any of your personal details.

Once you're logged in to your account,

- on the left hand panel, click on Tax Tools and then choose Tools

- on the pop up window, select Share my file with Agent

- you'll see a message saying you'll give us a copy of your tax return. Your personal information will be changed so we can't see any private information.

- click okay and you'll get another message with a token

Reply to this message with your token and we'll take a look to see what we can find. Let us know what other states, if any, are included in your return.

agus7inAuthor

This is my token 1273163.

I deleted and restarted my NY state return and got the same problem. Other state is CA.

KeshaH

Your NY income allocation percentage is being shown at 28%.

For part year residents and nonresidents, NY calculates tax liability as if you were a NY resident for the full year. The income shown as "NY taxable income" is your full income. When you get to the tax summary screen in TurboTax, that's what you are seeing.

After calculating the tax liability, NY then applies the income allocation percentage to prorate the tax based on how much income you earned in the state compared to overall. In your case, your tax liability is prorated by the 28%.

This is different than how some other states, such as California, calculate tax liability only on the income that you earned within that state.

TomD8

Employee

@agus7in

It's a quirk of New York tax law that the Box 1 wages on the W-2 must always match the New York wages in Box 16. It's up to the taxpayer to re-allocate the wages as appropriate on their New York tax return.

You can read NY's rules for Form W-2 on page 55 of this New York tax publication:

https://www.tax.ny.gov/pdf/publications/withholding/nys50_1223.pdf

**Answers are correct to the best of my ability but do not constitute tax or legal advice.