Live in MA, telehealth under NY license

Forum|Forum|2 years ago
March 21, 2024
1 reply
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We just moved from NY to MA. Longtime Turbotax users. My spouse has a telehealth private practice under her New York license with New York based patients but we are physically located in MA and she conducts all work from her home office in MA. She has an existing NY Tax ID number for her practice. Is her income generated while physically in MA under her NY license considered New York source income for tax purposes?

TomD8

Employee

If she's a self-employed independent practitioner, then all the income she earns by working in a MA location is MA-source income.

If she's a W-2 employee of a NY-based firm, then NY's "convenience of the employer" rule might apply. If this is the case, you can post back for details.

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

taxtax2288Author

Thanks for your reply!

She's an independent practitioner, so that's what I was thinking. It is certainly simpler if we only have to file MA taxes going forward.

However, I found this guidance which seems to suggest since she previously practiced the profession in NY it would be considered NY source income.

https://www.tax.ny.gov/pubs_and_bulls/tg_bulletins/pit/ny_source_income_nonresident.htm

What do you think?

TomD8

Employee

All her earnings during her period of New York residency are taxable by New York, regardless of where earned.

Once she became a resident of MA, all her income became taxable by MA. At that point NY could tax her as an MA resident only on NY-source income.

For the year of the move from NY to MA, you would file a part-year resident return for each of the two states and allocate your income accordingly.

Income from work physically performed in a MA location is MA-source income. There would be an exception if she were an employee of a NY-based employer, but that exception does not apply to independent practitioners.

Independent practitioner (self-employment) income is sourced where the work is actually (physically) performed. With the sole exception of California, the location of the independent practitioner's clients is irrelevant. (California uniquely taxes independent practitioners on income earned from California-based clients, even if the independent practitioner is a non-resident of CA who works from a location outside CA.)

Finally, if your wife as a non-resident of NY ever physically works within NY, that income would be NY-sourced and thus taxable by NY (as well as by her home state of MA).

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