Question

How will state tax be calculated if I changed to a remote job in another state.

Forum|Forum|5 years ago
March 15, 2021
1 reply
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I'm trying to figure out the state tax consequences for income and capital gains because of working remotely for a NY company. I am currently a Massachusetts resident and will continue to live in MA. However, I am getting a new job in May and will work for a New York company remotely.

1. Am I correct to assume that I will be filing for ~5 months of income for MA and 7 months of income for NY (Not NYC)? Or do I file 100% of my income to NY and nothing in MA?

2. Am I correct to assume that if I realize capital gains before May, it will be reported on the MA return and uses the MA capital gains rate? Otherwise, it uses the NY rate? Or do I file 100% of my realized capital gains under the NY state tax, regardless of when they were realized?

My only type of income is employment salary and my only type of capital gain is from stock trades.

E

ErnieS0

States tax people based on where they live and where they work.

A full-year Massachusetts resident is taxed on income earned everywhere. You will pay MA tax on your MA job, your NY job and all capital gains.

New York is more complicated. The state uses the “convenience of the employer” rule. That means you will pay tax to NY on your NY job if your employer decides you are working remotely for your benefit. If your employer decides you are working remotely for your employer’s benefit, then you owe no NY tax. Speak with Human Resources or Payroll to find out what they will do.

If you do pay NY tax, MA will give you a credit on tax paid to NY on double taxed income from your NY job.

You would not have to pay any capital gains tax to NY, except possibly if you sell employee stock.

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