Spouse Non-resident Income taxed out of state

Forum|Forum|1 year ago
February 7, 2025
1 reply
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I live in CT. I work in NY. All my income is from NY. I file non resident jointly with my wife.

My wife lives and works in CT. NOTHING from her income is from NYS. When I file my taxes I enter only my income lets say 100k. I get a refund of 1000. But after all the calculations are done, my refund goes down significantly to 600 when my wife's income is added. Even though only my income is entitled to be taxed in NYS.

Its been said that my gross income goes up with her income, and that's why NYS taxes me more. Its obvious that NYS is taxing more of my income because of my wife's CT income which they are not entitled to.

I used to be able to enter her income as a negative adjustment in older NYS turbo tax but I cannot anymore.

How can I subtract my wife's income from NYS?

LenaH

At first, it may appear as if New York taxes all your income, but you can rest assured that they don’t. New York State uses the New York Income Factor when determining your tax amount. Their state return starts with all your taxable income and taxes it at the applicable New York State rate based on your total income.

Then, the state uses your New York sourced income (the amount you allocated) to determine your New York Income Factor, which is what percentage of your income was earned in NYS. Lastly, they multiply your total tax by the New York Income Factor to determine your NYS tax.

You will see New York prorating your taxes on the Let's Review Your New York Numbers screen at the end of your New York return. You will see this toward the bottom of the screen, under the header Taxes.

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agloveraAuthor

Then can anyone explain why i do the entire tax exercise with just my income in NYS allocated to NYS at $100k and my refund is $1000, but when I add my wife's income of $20k and the allocated NYS amount of the $120k is still only $100k, my refund goes down to $600? The NYS allocated amount of $100k before and after her added income changes the NYS refund. That doesnt follow your statement. How can I fix it.?

LenaH

The tax may be different after adding your wife's income because you are now calculating tax in a higher tax bracket.

You can send us a “diagnostic” file that has your “numbers” but not your personal information. If you would like to do this, here are the instructions: Go to the black panel on the left side of your program and select Tax Tools.

Then select Tools below Tax Tools.
A window will pop up which says Tools Center.
On this screen, select Share my file with Agent.
You will see a message explaining what the diagnostic copy is. Click okay through this screen and then you will get a Token number.
Reply to this thread with your Token number. This will allow us to open a copy of your return without seeing any personal information.

We will then be able to see exactly what you are seeing and we can determine what exactly is going on in your return and provide you with a resolution.

[Edited 2/7/25 l 12:48 PM PST]

@aglovera

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