How Many Days Can You Work in New York Without Paying Taxes?

New York imposes specific tax obligations on non-residents who earn income within its borders. The requirement to pay state income tax depends on several factors, with the number of days spent working in New York being a primary consideration. However, it is not the only element that determines a non-resident’s tax liability.

New York’s General Rule for Non-Resident Income

New York State’s foundational principle for taxing non-residents is based on “New York source income.” Any income earned by a non-resident while physically performing work duties within the state’s boundaries is subject to New York income tax. This rule applies from the very first day of work, establishing a default tax obligation for any services rendered inside the state, regardless of how brief the period.

Before considering any exceptions, the presumption is that compensation for work performed in New York is taxable. The burden of proof falls on the taxpayer to demonstrate if this general rule does not apply to their specific circumstances. The state’s Tax Law mandates that employers making wage payments subject to New York personal income tax must deduct and withhold it, making physical presence for work the primary trigger for a tax liability.

The 14-Day Employer Withholding Safe Harbor

New York provides a safe harbor that relieves employers from withholding state income taxes for some non-resident employees. This rule only applies to the employer’s withholding duty. An employee may still have a personal income tax liability and must file a New York non-resident return if their New York source income is more than their standard deduction.

For the withholding safe harbor to apply, the employee must be assigned to a primary work location outside New York State and work for 14 or fewer days in New York during the calendar year. Any portion of a day spent performing work duties within New York counts as a full day for this threshold.

If a non-resident works in New York for 15 days or more, the employer withholding safe harbor is voided. In such cases, the employer must withhold tax on the income earned for all days worked in New York, starting from the first day.

Certain individuals and types of compensation are excluded from this safe harbor provision.

• Professional athletes, entertainers, and public speakers performing in the state
• Compensation that is dependent on the volume of business transacted
• Deferred compensation
• Income from some stock options related to prior-year services

Allocating Income to New York

When a non-resident earns income from New York sources, they must determine the portion of their total compensation subject to New York tax. This is accomplished through an allocation process based on the number of days worked inside and outside the state.

The standard method is the “days-worked allocation” formula: (Total Days Worked in New York / Total Days Worked Everywhere) x Total Compensation. “Total Days Worked Everywhere” includes all days an individual performed services for their employer, excluding non-working days like weekends, holidays, and vacation.

For example, if an employee worked 240 days in a year, with 30 of those days in New York, the allocation fraction would be 30/240, or 12.5%. This percentage is applied to their total compensation to determine the taxable portion. This calculation is detailed on Form IT-203-B, filed with the non-resident return, Form IT-203.

Accurate record-keeping is fundamental to substantiating an income allocation claim. Taxpayers should maintain detailed travel logs or expense reports that document which days were worked in New York. Without such documentation, the tax department may challenge the allocation and assess additional tax.

Understanding the Convenience of the Employer Doctrine

Separate from rules on physical presence, New York applies the “convenience of the employer” doctrine. This rule affects non-residents employed by a New York-based company who work remotely. If a non-resident’s assigned office is in New York, any days they work from home are considered New York workdays for tax purposes if the remote work is for the employee’s convenience, not the employer’s necessity.

For remote workdays to be treated as non-New York days, an employee must prove their home office is a “bona fide employer office.” This requires meeting a restrictive test showing the home workspace is a genuine business location of the employer. An employee must show their home office contains specialized equipment not available at the employer’s New York location, or that the employer has a clear business reason for establishing the workspace there.

This rule can result in a non-resident owing New York income tax on their entire salary, even if they rarely enter the state. It operates independently of the 14-day safe harbor because it is a test of work assignment, not physical presence.