IT-203-ATT Instructions for Nonresident and Part-Year Filers

Filing taxes as a nonresident or part-year resident in New York is more complex than for full-year residents. Form IT-203-ATT is used to report adjustments, additional taxes, and credits specific to those who lived in the state for only part of the year or earned income from New York while residing elsewhere. Completing this form correctly ensures accurate tax payments and maximizes deductions or credits.

Nonresident and Part-Year Resident Income Calculation

Nonresidents and part-year residents must allocate earnings based on where and when they were earned. Full-year residents report all income, but those who lived in or earned income from New York for only part of the year must determine the portion subject to state tax using the New York source income percentage.

To calculate this percentage, total New York source income is divided by total federal adjusted gross income (FAGI). For example, if a taxpayer earned $80,000 in total income but only $50,000 was sourced to New York, the New York source income percentage would be 62.5%. This percentage is then applied to deductions and credits, which are prorated based on income earned in the state.

New York-sourced income includes wages earned while physically working in the state, rental income from New York properties, and business income from in-state operations. Investment income, such as dividends or capital gains, is generally not considered New York-sourced unless tied to a business in the state. Remote workers must follow special rules—income is typically sourced to New York if the employer is based there and the work is not performed in another state for the employer’s convenience.

Allocation of Deductions or Exemptions

Nonresidents and part-year residents must adjust deductions and exemptions to reflect only the portion applicable to their New York income. Full-year residents claim the full amount of standard or itemized deductions, but those with limited New York tax liability must prorate these amounts based on their New York source income percentage.

For those who itemize, deductions such as mortgage interest, medical expenses, and charitable contributions must be allocated based on the percentage of income subject to New York tax. If a taxpayer owns a home in another state but worked in New York for half the year, only the portion of mortgage interest corresponding to the New York income ratio would be deductible. Similarly, medical expenses incurred while residing outside New York cannot be deducted unless directly tied to New York employment or residency.

Standard deduction filers must also adjust their claims. New York’s standard deduction varies by filing status, but nonresidents and part-year residents can only claim a prorated portion. For example, if the standard deduction for a single filer is $8,500 in 2024, a taxpayer who was a New York resident for six months would be eligible for approximately $4,250.

Exemptions for dependents follow the same principle. While federal tax law allows a set exemption per dependent, New York requires adjustments based on taxable income. If a taxpayer supports a dependent throughout the year but only earns 40% of their income from New York sources, only 40% of the dependent exemption applies to the state return.

Additional Taxes or Surcharges

New York imposes additional taxes and surcharges that can affect nonresidents and part-year residents, particularly those with high incomes or specific types of earnings. One such tax is the Metropolitan Commuter Transportation Mobility Tax (MCTMT), which applies to self-employed individuals and business owners conducting business within the Metropolitan Commuter Transportation District (MCTD). The MCTMT is calculated based on net earnings from self-employment allocated to the MCTD, with rates ranging from 0.11% to 0.60%.

Another factor to consider is the state’s tax on lump-sum distributions. If a taxpayer receives a large, one-time payout from a pension plan or retirement account while being subject to New York taxation, they may owe additional tax beyond regular income tax obligations. This is particularly relevant for those who worked in New York for a significant portion of their career but later moved out of state. The lump-sum distribution tax is calculated separately using a special formula to prevent taxpayers from benefiting unfairly from lower tax brackets in a single year.

High-income taxpayers should also be aware of the New York State supplemental tax on certain investment gains. This applies to individuals whose taxable income exceeds specific thresholds and can result in an additional tax on capital gains beyond standard state income tax rates.

Credit Adjustments

New York offers several tax credits that must be adjusted for nonresidents and part-year residents. One significant credit is the Earned Income Credit (EIC), which is calculated as a percentage of the federal EIC but must be prorated based on the taxpayer’s New York source income. If a taxpayer qualifies for a $1,500 federal EIC but earns only 60% of their income from New York sources, they can claim only $900 on their state return.

Education-related credits, such as the College Tuition Credit, also require adjustments. This credit allows taxpayers to claim up to $400 per eligible student for tuition expenses, but nonresidents and part-year residents must apply the New York source income percentage to determine the allowable portion. A student who pays $10,000 in tuition but whose parents have a New York allocation of 50% would be eligible for only a $200 credit instead of the full $400.

Refundable credits, including the Empire State Child Credit, follow similar rules. Since this credit is based on a percentage of the federal Child Tax Credit, it must be adjusted using the same income allocation principles.

Confirming Accuracy Before Filing

Ensuring the accuracy of a New York nonresident or part-year resident tax return helps avoid penalties, interest, or delays. Since income, deductions, and credits must be carefully allocated, even minor miscalculations can lead to incorrect tax liability. Before submitting Form IT-203-ATT, taxpayers should verify that all income sourced to New York has been properly reported and that deductions and credits have been prorated correctly. Reviewing supporting documentation, such as W-2s, 1099s, and employer-provided residency statements, helps confirm that reported figures align with actual earnings and time spent in the state.

Tax software and professional preparers can assist in identifying potential errors, but taxpayers should still cross-check calculations manually. The New York Department of Taxation and Finance provides online tools, including allocation worksheets and tax calculators, to help filers ensure compliance. If discrepancies arise, amending a return using Form IT-203-X may be necessary. Taxpayers should retain copies of all relevant documents for at least three years in case of an audit or request for further verification.