Nonresidents are subject to New York State income tax on their income from New York sources. Part-year residents are subject to New York State tax on all their income from all sources during the part of the year they are New York State residents, and on income from New York sources during the part of the year they are nonresidents.
According to the New York State Department of Taxation and Finance, you are considered a resident of New York if you are domiciled in New York or you maintain a permanent place of abode in New York and spend more than 183 days of the tax year in the state. Domicile is defined as the place which you intend to be your permanent home and where you intend to return whenever you are absent. The Nonresident Audit Guidelines go into depth as to how residency is determined for New York State tax purposes.
Nonresidents and part-year residents must file Form IT-203, Nonresident and Part-Year Resident Income Tax Return if their New York adjusted gross income is more than their New York State standard deduction. Even if you are not required to file, you should file a New York return if you can claim a refund of any New York State, New York City, or Yonkers income tax withheld from your pay; or if you can claim any tax credits. For example if you are a part-year resident and qualify to claim the earned income credit and/or the child and dependent care credit, you can receive a refund even if you owe no tax. The credits are indicated in the Instructions for Form IT-203.
If you are married and file a joint federal return and one spouse is a New York State resident and the other is a nonresident or part-year resident, you must file separate New York State returns. You can choose to file a joint New York State return but in that case both spouses will be subject to tax on all their income from all sources, as if both are full-year residents. The New York State Department of Taxation and Finance points out that the term spouse is considered gender neutral for state tax purposes.
New York source income includes income for services performed in New York; income, gains, losses and deductions from a business, trade, profession or occupation carried out in New York; income related to a business, trade, profession, or occupation previously carried out in New York, such as covenants not to complete and termination agreements; your share of income from a New York State partnership, S corporation, trust or estate; income from real or tangible property located in New York; gains or losses from the sale or exchange of an interest in an entity that owns real property in New York; and winnings of more than $5,000 from the New York State Lottery.
Your trade, business, profession or occupation is generally considered to be carried on in New York State if you maintain, operate or occupy a place of business in New York where you regularly carry on your business, including an office, shop, store, factory, warehouse or agency. If you keep separate records for your business in New York, you can use those records to determine the business income reportable for New York State tax purposes. Otherwise you would have to allocate your business income on Form IT-203-A, Nonresident Business Allocation Schedule. The allocation is based on the percentages of real and tangible personal property, payroll, and gross income inside and outside New York.
New York source income does not include compensation for active service in the United States military or income earned in New York by the spouse of a member of the military who is not a resident of New York and is in New York only to be with the spouse who is a member of the armed services stationed in New York.
Also, New York source income does not include interest, dividends and gains from intangible personal property unless they are from carrying on a business, trade, profession or occupation in New York. Income as a shareholder of a New York C corporation is not considered New York source income if you are a nonresident. Gambling winnings other than winnings in excess of $5,000 from the New York State lottery are not considered New York source income. Pension income received by nonresidents from qualified pension or retirement plans is not taxable in New York.
If you work for an interstate rail carrier, motor carrier or private motor carrier and you perform duties in more than one state, your compensation in New York would not be subject to tax in New York if you are not a resident. Compensation you receive if you work for an airline would not be taxable in New York if you are not a resident and 50% or less of your compensation is earned in New York. And you would not be subject to tax in New York if you are a nonresident and work on a vessel that operates on waters of more than one state.
Form IT-203, Nonresident and Part-Year Resident Income Tax Return
Form IT-203-A, Nonresident Business Allocation Schedule
Instructions for Form IT-203, New York State Department of Taxation and Finance
New York Source Income of Nonresident Individuals, Estates, and Trusts, and Part-Year Resident Individuals and Trusts, New York State Department of Taxation and Finance
Nonresident Audit Guidelines, New York State Department of Taxation and Finance