How do I complete the New York Income allocation on Form IT-203 and IT-203-B? (Part-year/Nonresident returns)

New York employers are required by law to enter in Box 16 of the W-2, all income earned- not just the income for New York. This means if you earned money from an employer and that income is not taxable to New York, you will need to manually allocate the New York income on your tax return to avoid being taxed on the same income in more than one state. 

NOTE: You do NOT need to allocate if your New York W-2 wages show the correct amount of income you earned in new York. Only use the allocation if your New York W-2 wages include income earned in another state. 

Allocating New York W-2 income

Please note: This is to allocate the wages on the W-2. If you have any other income (Schedule C, Schedule E, Interest, Capital Gains, Unemployment, Etc.) taxable to New York on the part-year or Nonresident return, you must allocate that income manually. The program will only pull the W-2 income in Box 16 to the New York return.

To manually allocate income other than the W-2 income to New York:

• State Section
• New York part-year or nonresident return (edit)
• Income Subject to Tax
• Enter Income, other than Wages, taxable to New York

Creating the New York Part-Year/Nonresident return (IT-203 Form) 

To allocate your income, first create the New York part-year or nonresident return (Form IT-203). 

• State Section
• New York part-year or nonresident return
• Income Subject to Tax
• NY IT-203B Schedule A - Allocation of wage and salary income to New York State
• + Add Entry

Allocating the income (IT-203-B Form)

On the NY IT-203-B Schedule A - Information screen, you are asked a series of questions which will allow the program to calculate your NY portion of the income. It is important that these questions are answered completely and correctly to allow the program to correctly figure the income reported on Form IT-203, Line 1, New York State amount column.

1. Enter the total number of days you were employed at this job during 2022 including your NonResident period and any nonworking days completed below. If employed all year, enter 365.

   • Enter the total number of days worked for the employer you are allocating that has New York listed in Box 16.

2. Enter the total number of days you worked outside of New York

   • Enter the information for the W-2(s) that have New York listed in Box 15.

3. Enter the total number of days worked at home

   • Days worked at home are considered New York workdays only if the employee’s assigned
     or primary work location is at an established office or other bona fide place of business of the employer in New York State.
   • If the employee’s assigned or primary work location is at an established office or other bona fide place of business of the employer outside New York State, then any normal workday worked at home would be treated as a day worked outside New York State

4. Enter the amount of wages, salaries, tips, etc. earned during the nonresident/part-year residency period

   • Enter the amount of wages, salaries, tips, etc. earned during the nonresident period. If you changed your residence into or out of New York State during the year, do not include any
     income earned during the resident period in this amount.

NONWORKING DAYS

1. Enter the number of Saturday and Sundays not worked
   • Enter the number of Saturdays and Sundays included in the total number of days worked for this employer
2. Enter the number of Holidays not worked
   • Number of holidays not worked included in the total number of days worked for this employer
3. Enter the number of days taken for Sick Leave
   • Enter the total number of days you did not work because of sickness during this period of employment.
4. Enter the number of days taken for vacation
   • Enter the total number of days you did not work because you were on vacation during this period of employment.
5. Enter the number of other nonworking days
   • Enter the total number of days you did not work for other reasons during this period of employment. 

Example: 

Maggie lived and worked in New York until March 1 when she moved to Massachusetts.

~ She continued to work for the same employer but moved to the MA office.

~ Her total income from the employer was $50,000.

~ $7,500 is taxable to New York.

~ Her W-2 shows $50,000 in box 16 for New York (if it shows only $7,500, she does not need to complete the allocation form).

Completing the form:

1. She enters 365 for the total number of days employed at the job (Line 1a, IT-203-B)
2. She enters 307 for total number of days worked outside of New York (Jan 31 days + Feb 27 days = 58; 365-58= 307) (line 1j, IT-203-B)
3. She does not work from home
4. She enters $42,500 for wages as this is the amount she earned while working in Massachusetts (Line 1o, IT-203-B)

NONWORKING DAYS

1. She enters 104 for the number of Saturdays and Sundays not worked.  (2 per week X 52 weeks) (Line 1b, IT-203-B)
2. She enters 9 for the Holidays not worked. This is the number of holidays her employer recognizes included in the days she worked for the employer (Line 1c, IT-203-B)
3. She enters 6 for number of sick days taken while working for this employer (Line 1d, IT-203-B)
4. She enters 15 for total number of vacation days taken during the time working for this employer (Line 1e, IT-203-B)
5. She does not enter any days for Other nonworking days (Line 1f, IT-203-B)

Allocation Results

IT-203-B

Based on the example listed above, the IT-203-B will allocate the income as follows:

IT-203

This allocation will in turn, allocate the $7,500 to New York on the IT-203 as follows:

What if I have more than one employer to allocate? What if my spouse also needs to allocate?

For each employer that needs to have the W-2 income allocated, a separate allocation form must be created. Complete a new allocation form by choosing:

• Income Subject to Tax
• NY IT-203B Schedule A - Allocation of wage and salary income to New York State
• + Add Entry

If your spouse must also allocate the New York income on their W-2, follow the same instructions above to create additional allocation forms.