New York employers are generally required to report all wages earned from that employer in Box 16 of Form W-2, even if part of those wages were earned outside New York. Because of this, some taxpayers filing a New York part-year resident or nonresident return may need to allocate their wages to ensure only the income taxable to New York is reported on the return.
Important: You do not need to allocate wages if the New York amount shown in Box 16 already reflects only your New York wages.
When Do I Need to Allocate Income?
You may need to complete a wage allocation if:
- You're filing a New York part-year resident return.
- You're filing a New York nonresident return.
- Your W-2 reports all wages in New York Box 16, even though some of the wages were earned outside New York.
Common examples include:
- Moving out of New York during the year.
- Working part of the year in another state.
- Transferring to an out-of-state office while remaining employed by the same employer.
What Income Does IT-203-B Allocate?
Form IT-203-B Schedule A allocates only:
- Wages
- Salaries
- Tips
- Other employee compensation reported on Form W-2
The allocation worksheet does not automatically allocate other types of income.
Other Income Must Be Allocated Separately
If you have income such as:
- Schedule C business income
- Schedule E rental income
- Interest income
- Dividends
- Capital gains
- Unemployment compensation
- Retirement income
you must manually enter the New York taxable portion.
Path:
- State Section
- Edit New York Part-Year or Nonresident Return
- Income Subject to Tax
- Enter Income Other Than Wages Taxable to New York
How Do I Create the IT-203-B Allocation Form?
Before allocating wages, create the New York part-year or nonresident return.
Path:
- State Section
- Edit New York Part-Year or Nonresident Return
- Income Subject to Tax
- NY IT-203-B Schedule A - Allocation of Wage and Salary Income to New York State
- Complete the allocation screen
How Do I Complete the Wage Allocation?
Step 1: Enter Total Days Employed
Enter the total number of calendar days you were employed by that employer during the year.
Examples:
- Full-year employment: 365
- Partial-year employment: actual number of days employed
This total should include both working and nonworking days.
Step 2: Enter Days Worked Outside New York
Enter the number of days actually worked outside New York.
Before entering this amount:
- Determine total workdays.
- Subtract all nonworking days.
- Calculate how many actual working days occurred outside New York.
This helps the program calculate the percentage of wages taxable to New York.
Step 3: Enter Days Worked at Home
Work-from-home days are treated differently depending on your assigned office location.
Assigned Office Located in New York
If your primary or assigned office is located in New York, work-from-home days are generally treated as New York workdays.
Assigned Office Located Outside New York
If your assigned office is located outside New York, normal work-from-home days are generally treated as days worked outside New York and should be included in your non-New York workday count.
Step 4: Enter Wages to Be Allocated
Enter the wages reported from the employer that require allocation.
Typically, this is the amount shown on the W-2 that was reported to New York but was partially earned outside New York.
How Do I Enter Nonworking Days?
Nonworking days are entered for the employer as a whole, not by individual state.
Include:
Saturdays and Sundays Not Worked
Enter the total number of weekend days not worked.
Example:
- 52 weeks × 2 weekend days = 104 days
Holidays Not Worked
Enter employer-recognized holidays that occurred during the employment period.
Sick Days
Enter the total number of sick leave days taken.
Vacation Days
Enter the total number of vacation days taken.
Other Nonworking Days
Enter any additional days not worked for reasons such as:
- Personal leave
- Jury duty
- Unpaid leave
- Other approved absences
Example of a New York Wage Allocation
Facts
Maggie:
- Lived and worked in New York until March 1.
- Moved to Massachusetts and continued working for the same employer.
- Earned $50,000 total wages.
- Has a W-2 showing $50,000 in Box 16 for both New York and Massachusetts.
Allocation Entries
Maggie enters:
- Total days employed: 365
- Days worked outside New York: 171
- Days worked at home: 0
- Wages to allocate: $50,000
Nonworking Days
Maggie enters:
- Saturdays and Sundays not worked: 104
- Holidays not worked: 9
- Sick days: 6
- Vacation days: 15
- Other nonworking days: 0
Total nonworking days = 134
The program then determines:
- Total working days.
- Days worked in New York.
- New York work percentage.
- New York taxable wages.
The calculated New York wages are then transferred to Form IT-203.
Allocation Results
IT-203-B
Based on the example listed above, the IT-203-B will allocate the income as follows:
As you can see on line 1l, the total days worked in NY are 60. The program will then divide the 60 days worked in NY by the total days worked in the year (line 1m) to figure a percentage for line 1n. That percentage is then applied to the wages to figure the allocation.
IT-203
This allocation will in turn, allocate $12,985 to New York on the IT-203 as follows:
How Does the Allocation Formula Work?
The allocation calculation generally works as follows:
New York Work Days ÷ Total Work Days = New York Percentage
The resulting percentage is multiplied by the wages being allocated to determine the amount taxable to New York.
The calculation flows from:
- Schedule A of Form IT-203-B
- To Form IT-203
- Line 1, New York State Amount column
What If I Have More Than One Employer?
A separate allocation form must be completed for each employer whose wages require allocation.
Path:
- State Section
- Edit New York Part-Year or Nonresident Return
- Income Subject to Tax
- NY IT-203-B Schedule A - Allocation of Wage and Salary Income to New York State
- Select + Add Entry
Create one allocation worksheet for each employer.
What If My Spouse Also Needs an Allocation?
If your spouse also has wages that need to be allocated:
- Create a separate IT-203-B entry for each of your spouse's employers requiring allocation.
- Complete the allocation information using your spouse's workdays, nonworking days, and wages.
Each taxpayer's allocation is calculated separately, even when filing jointly.
How Does This Affect My Return?
Completing Form IT-203-B correctly may:
- Reduce New York taxable wages
- Prevent double taxation by multiple states
- Lower New York tax owed
- Increase your refund
- Ensure only New York-source wages are taxed by New York
Failing to allocate wages when required may result in too much income being taxed by New York.
Important Information
- Only allocate wages if Box 16 includes wages earned outside New York.
- W-2 wage allocation does not allocate other income types.
- Schedule C, Schedule E, investment income, unemployment, and similar income items must be allocated separately when applicable.
- Work-from-home days may be treated as New York workdays depending on your assigned office location.
- Separate allocation forms are required for each employer.
- Spouses must complete separate allocations for their own employers.
- Keep records supporting your workday calculations and residency periods.
Additional Information
Before completing Form IT-203-B, gather your W-2s, work schedules, payroll records, and residency dates. Accurate workday and nonworking-day information are key to calculating the correct percentage of wages taxable to New York.
If you moved during the year or worked in multiple states, taking the time to properly allocate your wages can help prevent double taxation and ensure your New York part-year or nonresident return is calculated correctly.
If your spouse must also allocate the New York income on their W-2, follow the same instructions above to create additional allocation forms.