How Do I Allocate Income on a New York Part-Year Resident or Nonresident Return?

If you're filing a New York Part-Year Resident or Nonresident return, you'll need to allocate your income to determine what portion is taxable by New York.

In general, New York taxes:

• Income earned from New York sources, and
• Income earned while you were a New York resident.

Because of that, it's important to review each type of income and allocate it correctly on your New York return.

How Do I Allocate W-2 Income?

For most taxpayers, W-2 wages are automatically transferred to the New York return based on the state wage information reported on the W-2.

However, if you worked both:

• Inside New York, and
• Outside New York

for the same employer, you may need to complete Form IT-203-B, Schedule A, Allocation of Wage and Salary Income to New York State to determine the correct amount of wages taxable to New York.

Program Navigation

1. State Section
2. Edit New York Part-Year or Nonresident Return
3. Income Subject to Tax
4. NY IT-203-B Schedule A – Allocation of Wage and Salary Income to New York State

Complete all required sections of the allocation worksheet. The program will calculate the New York taxable wage amount based on the number of days worked inside and outside New York.

Example

If you earned $80,000 from an employer and worked:

• 150 days in New York
• 100 days outside New York

the allocation worksheet would generally assign a larger portion of the wages to New York based on the ratio of New York workdays to total workdays.

How Do I Allocate Income Other Than Wages?

Unlike W-2 wages, most other types of income must be allocated manually on the New York return.

This may include:

• Schedule C business income
• Schedule E rental income
• Interest income
• Dividend income
• Capital gains
• Unemployment compensation
• Retirement income
• Other income items

Program Navigation

1. State Section
2. Edit New York Part-Year or Nonresident Return
3. Income Subject to Tax
4. Enter Income Other Than Wages Taxable to New York

Enter the portion of each income item that is taxable to New York based on New York residency and sourcing rules.

What If I Have More Than One Employer?

A separate wage allocation form should be completed for each employer whose wages require allocation.

Program Navigation

1. State Section
2. Edit New York Part-Year or Nonresident Return
3. Income Subject to Tax
4. NY IT-203-B Schedule A – Allocation of Wage and Salary Income to New York State

Create a new Schedule A entry for each employer and complete the allocation information separately.

What If My Spouse Also Needs to Allocate Wages?

If both spouses have wages that require allocation, each spouse should complete a separate allocation form for their own employer(s).

For example:

• Taxpayer has two employers requiring allocation.
• Spouse has one employer requiring allocation.

In that situation, three separate allocation schedules would generally be completed:

• Taxpayer Employer #1
• Taxpayer Employer #2
• Spouse Employer #1

This allows the program to calculate each allocation independently and accurately.

Important Tips for New York Income Allocation

• W-2 wages are generally pulled automatically from the W-2 but may require adjustment through IT-203-B Schedule A.
• Most non-wage income must be allocated manually.
• Complete a separate wage allocation schedule for each employer that requires allocation.
• Complete separate allocation schedules for each spouse when applicable.
• Carefully review all income items before filing to ensure only the correct New York-source income is included on the return.

Proper income allocation helps ensure you pay tax only on the income New York is entitled to tax and can prevent processing delays or notices from the state.