Taxes When You Live in Florida and Work in New York

Living in a state with no personal income tax, like Florida, while earning income from a high-tax state, such as New York, introduces tax complexities. New York has regulations for taxing the income of individuals who work for New York-based companies but reside elsewhere. Proper tax compliance requires a detailed examination of your connections to both states to determine your official residency status. This status dictates which state has the right to tax your earnings and requires diligent record-keeping.

Establishing Florida Domicile and New York Nonresidency

The first step is to establish Florida as your domicile, which is the legal term for the one place you consider your permanent home. While you can have multiple residences, you can only have one domicile, which is the place you intend to return to after any absence. Establishing Florida as your domicile is an active process that requires demonstrating a clear intent to make the state your permanent base.

To create a strong case for Florida domicile, you must take several concrete actions:

• File a “Declaration of Domicile” with the clerk of the circuit court in your Florida county.
• Obtain a Florida driver’s license and register your vehicles in the state.
• Register to vote in Florida.
• Transfer primary bank accounts to Florida institutions.
• Update your address on all financial accounts and legal documents.
• Apply for a homestead exemption on your Florida property.

The more of these ties you can center in Florida, the clearer your intent becomes to tax authorities.

Even with a clearly established Florida domicile, you could still be considered a New York resident for tax purposes under its “statutory residency” test. This test applies if you maintain a permanent place of abode in New York for substantially all of the taxable year—a period defined as exceeding 10 months—and you spend more than 183 days physically present in the state. Satisfying both conditions means New York will tax you as a resident, regardless of your Florida domicile.

A “permanent place of abode” is a dwelling place suitable for year-round use that you maintain. To avoid meeting the 183-day requirement, you must meticulously track your time in New York. Keeping a detailed calendar, along with supporting documentation like travel receipts and credit card statements, is necessary to prove you stayed below the threshold. Any part of a day spent in New York counts as a full day for this test.

Determining Your New York Source Income

Once you have confirmed your status as a New York nonresident, you must identify which portion of your income is subject to New York tax. As a nonresident, you are only taxed on income derived from New York sources. This means that income earned from services performed outside of New York is not taxable by the state, with some exceptions.

For employees, income is allocated based on the number of days worked inside New York versus the total number of days worked. To do this, determine the total number of days you worked for the employer during the year, then subtract non-work days like weekends, holidays, and vacation days to find your total workdays. The ratio of days worked physically within New York to your total workdays is then applied to your salary to find your New York source income. For example, if you worked 20 days in New York out of a total of 250 workdays, 8% of your salary would be considered New York source income.

New York’s “convenience of the employer” rule adds a layer of complexity to this allocation. If you work outside of New York for your own convenience, rather than because your employer requires it, New York may consider all of your income to be New York sourced. To avoid this, it is helpful to have a formal work arrangement that designates your Florida location as your primary office.

Other types of income may also be considered New York sourced. This includes income from a business or partnership that operates in the state or rental income from a property located in New York. However, for most nonresidents, investment income such as interest, dividends, and capital gains from the sale of stocks is not considered New York source income and is therefore not subject to New York tax.

Calculating Your New York Tax Obligation

New York employs a specific, multi-step method for nonresidents that differs from a simple application of tax rates to your sourced income. This process ensures that the state’s progressive tax rates are applied fairly, based on your overall ability to pay.

The calculation begins by determining a tax amount as if you were a full-year New York resident. This means you compute the tax on your total income from all sources, both inside and outside of New York, using New York’s tax brackets and standard or itemized deductions. This initial calculation establishes a baseline tax liability based on your entire income for the year.

Next, you must calculate an income percentage. This is found by dividing your New York source income by your total federal adjusted gross income. The final step is to multiply the tax amount calculated in the first step by this income percentage. The result is your actual New York tax liability as a nonresident. This method effectively applies New York’s higher tax rates to your New York income if your total income is high, even if your New York-sourced portion is relatively small. Additionally, if your work was performed within New York City or Yonkers, you may be subject to separate local income taxes on your New York source wages.

New York State Filing Procedures for Nonresidents

The primary form for filing your tax return with the New York State Department of Taxation and Finance is Form IT-203, the “Nonresident and Part-Year Resident Income Tax Return.” This form is specifically designed for individuals who earn income in New York but do not live there for the entire year.

When completing Form IT-203, you will need to attach Form IT-203-B, “Nonresident and Part-Year Resident Income Allocation and College Tuition Itemized Deduction Worksheet.” On this form, you must provide a detailed breakdown of how you allocated your wage and salary income, including the total number of days worked and the number of days spent working in New York. This schedule is where you justify the amount of income you have reported as New York sourced.

You can obtain the necessary forms from the New York State Department of Taxation and Finance website. The state encourages electronic filing, which is the fastest and most secure method, though you can also mail a paper copy. The standard filing deadline is April 15th, aligning with the federal tax deadline.