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New York State Tax Question (1 Viewer)

Johnny Angell

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I have a friend who moved from Arkansas to NY state. She is claiming that NY is taxing her on both her NY income and AR income. Is that legal, can they do that?

Years ago when we moved from California to Arkansas, California taxed us only on the income we earned in CA, but at the rate we would have reached had we earned all our income in CA. I.E. CA taxed us at a higher rate than the amount would normally have been taxed at. It pissed me off, but they did it.

I tried to explain to her (via FB) that this may be what is happening, but she says no. I'm having a hard time believing NY can tax income not earned in NY.
 

DaveF

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It's been over 20 years since I dealt with this, so...I think she needs to file in AR for income earned while resident there, then claim that on her NY tax filing.

I think NY is claiming she owes taxes for the year since she was a full-time resident.

When in doubt, see an accountant. It's one of the annoyances of moving mid-year.
 

Adam Lenhardt

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Both the state where the income was earned and the state where the taxpayer resides are entitled to tax that income. But I believe (I would definitely double-check!) that if she paid income tax to Arkansas, she can claim a credit for what she paid Arkansas on her New York State return.

Explain to Mike Frezon why he shouldn't retire someplace other than NYS.
Because he's a New York State employee, and New York State pension distributions aren't taxed by the State of New York for New York residents!
 

Dennis Nicholls

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Most states have separate tax forms for full-year and part-year residents. In Idaho it's form 40 and 43, respectively. in California it's form 540 and 540NR.
 

Aaron Silverman

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One year, I had to file in MA, NY, NJ, and CA! And that was back when I did it by hand with a pencil and a calculator.

Going by memory, I think Adam is correct -- she'll probably be able to claim the tax paid to AR as a credit on her NY tax.
 

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