Posted on 03/07/2019 6:24:56 AM PST by tired&retired
I'm doing a New York Non-Resident Tax Return and it is the most unfair tax law on non-residents I have seen in over 40 years of doing taxes.
New York, with one of the highest tax rates in the USA computes your NY Tax by applying their high rate to all your income on the Federal Return and then allocating the tax based upon the percentage of NY income to total Federal income. The effect of this is to tax your out of state income at the New York higher tax rate which is illegal.
Example: $8,500 income from wages in NY. $31,500 income in Pennsylvania where residency was maintained all year.
NY computes the tax on the $40,000 Federal total and then allocates it by the ratio of $8,500 divided by $40,000.
This effectively has NY taxing PA income which is illegal.
Minnesota- started this a couple of years ago...
EVEN IF you VISIT! (for a few months!)- they want their money!
Delaware did it to me 30 years ago ...
CA tried to tax soldiers for TDY duty in their state. Those at DLI for 1.5 years got stuck with paying CA state income tax AND their home of record state income tax. I think some legislation unscrewed THAT fiasco.
That feature in IL tax code is the only thing that is keeping at least some of the retirees there.
“It’s very interesting that, here in crazy-tax Illinois, I’ve found that the state doesn’t tax any retirement income (SSI or RMD), so far.”
I’m in that category. The shits of it is my wife isn’t and if you throw in the wretched real estate tax it works out to about $1,000/month. If you are unfortunate enough to live in Chicago you also have to contend with a 10.25% sales tax.
So get an advocacy lawyer and sue NY. Complaining when you have no voice in NY doesn’t help.
You’re right. The lack of retirement tax is the only thing that’s keeping me here. We have good friends here and like the geography and four season weather.
Property taxes are terrible.
“Cumo needs the money...Fox News should move out of NYC”
It’s just the legal modernized version of the old mafia protection racket (street tax). You pay us (the state) what we want and nothing will happen to you, your family or house. If you don’t...
I think most states do it that way. Sorry.
I wish Wisconsin or Iowa had a similar deal!
The gouging by NY State is worse than you think.
This is the NY State “progressive” income tax rates:
4 % on the first $8,500
4.5 % on income between 8,501 and $11,700
5.25 % on income between $11,701 and $13,900
5.9 % on income between $13,901 and $21,400
6.33 % on income between $21,401 and $80,650
6.57 % on income between $80,651 and $215,400
6.85 % on taxable income between $215,401 and $1,077,550
8.82 % on taxable income of more than $1,077,550.
Forgetting all that for the moment; given the formula you said is used to calculate your tax as a non-resident, they figure the tax on the total income, and then use the fraction represented by the non-resident income divided by the total. Using your example of $40,000 and $8,500, that ratio would be .2125 or 21.25% of the tax due on whole $40,000.
The 2018 NY tax tables say that the tax on $40,000 is $1,917 if filling as married filing jointly, or $2,221 if filing as single.
21.25% of the $1,917 is $407.
21.25% of the $2,221 is $470.
But using the tax tables, a straight tax on the $8,500 is only $341. That means the NY tax is either $66 or $129 more than what the regular tax on the $8,500 would be, depending on which filing method is used - single or married filing jointly.
They screw you first because they do not merely apply the appropriate tax on the non-NY income alone.
They screw you also because the effective tax rate (% applied to the income) on the $40,000 is higher than what would be applied on the $8,500 alone. They wind up taxing not only on a part of the income acquired outside NY, but the method has an applied tax rate that is a higher effective tax rate (%) than would be applied to $8,500 by itself.
Unfortunately, federal suits against the states on either due process or equal protection grounds, with regard to their tax practices & tax formulas concerning income taxes as applied to non-residents, have not fared well. The federal courts have been disinclined to get involved.
Yes, any professional player that plays games within New York has to pay New York taxes on the salary earned within the state. If your team is based in NY then at least half of your salary is taxed at the NY rate.
One reason Rush left for Florida was the taxes—Florida doesn’t have an income tax. And NY examines every of his visits to the state in hopes of catching him earning income.
But California might be even more greedy. They tried to tax the pensions of people who had moved out of the state after retiring. “You can check out, but you can never leave.”
Been there. Too cold,
‘Course it’s cold in Alabama right now, too Still, I own my own house here, free and clear, and I hate to move.
But best wishes and have fun.
I’ve heard professional athletes pay state income tax in every state they play a road game, and not just in their home state. So visiting NBA players in town to play the Knicks and Nets get nailed .
The players with multi million dollar contracts must have incredibly complicated tax returns.
Heh. I don’t think I’d move either if I were you. :)
BTW, I saw a lot of kudzu when we drove through Alabama next to the freeway. I’ve heard it’s not really the rapidly growing thing everyone claims it is. That is, once you clear it, it comes back a lot slower than most stuff. Is that true?
Isn't that what you actually meant to write?
Regards,
I’m believe that Oregone did the same thing decades ago.
One of our younger relatives moved to Oregon about mid year.
The incredibly high Oregon tax on wages was calculated on his total earnings.
Then, when he moved back here decades later, mid year, again his Oregon gross taxes were based on his total federal taxes.
Communism sucks doesn’t it.
NOT Texas.
NY taxes everything any time they can.
I visited my daughter in Nevada. While I was there her computer died (motherboard). We went to the store and she picked out a new PC. I paid for it with my credit card. New York hit me for the sales tax , because I live in NY. The computer was not made in NY, not used in NY and would never leave Nevada.
I argued with the tax vampires, but unsuccessfully.
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