New York Codes, Rules and Regulations › Title 20 - DEPARTMENT OF TAXATION AND FINANCE › Chapter II - Income Taxes and Estate Taxes › Subchapter A - New York State Personal Income Tax Under Article 22 Of The Tax Law › Article 3 - Nonresidents › Part 132 - New York Adjusted Gross Income of a Nonresident Individual › Methods of Allocating Income and Deductions from Sources Within and Without New York State › Section 132.18 - Earnings of nonresident employees and officers

Current through Register Vol. 46, No. 28, July 10, 2024
(a) If a nonresident employee (including
						corporate officers, but excluding employees provided for in section
						132.17  of
						this Part) performs services for his employer both within and without New York
						State, his income derived from New York State sources includes that proportion
						of his total compensation for services rendered as an employee which the total
						number of working days employed within New York State bears to the total number
						of working days employed both within and without New York State. The items of
						gain, loss and deduction (other than deductions entering into the New York
						itemized deduction) of the employee attributable to his employment, derived
						from or connected with New York State sources, are similarly determined.
						However, any allowance claimed for days worked outside New York State must be
						based upon the performance of services which of necessity, as distinguished
						from convenience, obligate the employee to out-of-state duties in the service
						of his employer. In making the allocation provided for in this section, no
						account is taken of nonworking days, including Saturdays, Sundays, holidays,
						days of absence because of illness or personal injury, vacation, or leave with
						or without pay.
Example 1:A, a resident of Connecticut, is an officer
						  and substantial stockholder of the X Corporation, having its principal office
						  in New York City. During the taxable year, A performs the following services
						  for X Corporation:
Services performed for X Corporation wholly
within New York State. 210 days
Sales conventions in Hot Springs, Ark. and Miami, Fla.
						  (A passed through New York State to board
airplanes on four of these days.) 10 days
Calling on customers in Pacific Coast states. 20
						  days
A's salary from the X Corporation is $40,000 per
						  year.
A's New York adjusted gross income is determined as
						  follows:
Total number of working days within New York State
						  (210) divided by total number of working days both within and without New York
						  State (240) is 210/240 or 87.5 percent, which, when applied against A's salary
						  of $40,000, equals $35,000, A's New York adjusted gross income. Days on which A
						  entered New York State solely for the purpose of boarding or disembarking from
						  an airplane or train do not count as days worked in New York State.
Example 2:B, a resident of New Jersey, is an employee
						  of the X Corporation, having its principal office in New York City. During the
						  taxable year, B was sent to Chicago by X Corporation to help establish a new
						  sales office. All other services which he performed for X Corporation were
						  performed wholly within New York State. B passed through New York State to
						  board a plane on Sunday, March 31st, and to disembark on Friday, April 26th.
						  While in Chicago, B held meetings in his hotel room on Saturday, April 6th, and
						  Saturday, April 20th. B allocates 217 working days to New York State as
						  follows:
Total days in year 365
Nonworking days:
Saturdays and Sundays (there are 104 Saturdays and
						  Sundays; however, since the Sunday spent traveling and the two Saturdays spent
						  holding meetings in his hotel room in Chicago are to be included in total
						  working days, these days are not included in nonworking days). 101
Holidays 11
Sick leave 3
Vacation 10
Total nonworking days 125
Total days worked during year (365 minus 125)
						  240
Total days worked outside New York State. (A total of
						  27 days was spent in Chicago; however, four of these days are Saturdays or
						  Sundays on which no services were rendered for his employer and are included in
						  nonworking days, not in days worked outside New York State. Therefore, in
						  determining the total number of days worked outside New York State, B includes
						  the 20 normal working days spent in Chicago, plus the Sunday spent traveling,
						  plus the two Satur-
days spent holding meetings in his hotel room.)
						  23
Total days worked in New York State (240 minus 23)
						  217
(b) Where a nonresident
						employee (including corporate officers, but excluding employees provided for in
						section
						132.17  of
						this Part) performs services both within and without New York State for only
						part of a taxable year, his income derived from New York State sources during
						that period includes only that portion of compensation received during the
						period he performs services both within and without New York State, multiplied
						by a fraction the numerator of which is the number of days he worked within New
						York State and the denominator of which is the number of days he worked both
						within and without New York State during the period he was required to perform
						services both within and without New York State.
Example:E, a resident of New Jersey for the entire
						  taxable year, was employed by T Corporation for the entire taxable year. During
						  the period from January 1st through June 30th he worked at the company's
						  Philadelphia, Pa. office. Since E did not perform any services within New York
						  State during this period, none of the compensation received for such period
						  would be includible in computing his New York adjusted gross income. On July
						  1st, E was transferred to the company's New York City office where he was
						  required to perform services both within and without New York State. The New
						  York adjusted gross income of E includes the total compensation received from T
						  Corporation during the period from July 1st through December 31st, multiplied
						  by a fraction the numerator of which is the number of days worked within New
						  York State during the period from July 1st through December 31st and the
						  denominator of which is the total number of days worked both within and without
						  New York State during this same period.
(c) If a nonresident employee (including
						corporate officers, but excluding employees provided for in section
						132.17  of
						this Part) performs services for more than one employer both within and without
						New York State, he must determine separately for each such employer the
						allocable compensation attributable to New York State sources. In determining
						the income from New York State sources, the total compensation from each such
						employer must be multiplied by a fraction the numerator of which is the number
						of days the nonresident employee performed services within New York State for
						such employer and the denominator of which is the total number of days during
						which the employee performed services both within and without New York State
						for such employer. The sum of the amounts of compensation determined as
						allocable to New York State sources must be included in computing the New York
						adjusted gross income of the nonresident employee.
Example:B, a resident of New Jersey, performed services
						  for Y Corporation during the period January 1st through June 28th, for which he
						  received total compensation of $20,000. He performed services for Y Corporation
						  a total of 120 working days during this period, of which 90 days were
						  attributable to services performed wholly within New York State and 30 days
						  were attributable to services performed wholly outside New York State. B
						  terminated his employment with Y Corporation at the close of business on June
						  28th and went to work for Z Corporation on July 1st. For the period July 1st
						  through December 31st he received total compensation of $25,000. He performed
						  services for Z Corporation for 120 working days during this period, of which 60
						  days were attributable to services performed wholly within New York State and
						  60 days were attributable to services performed wholly outside New York State.
						  B's New York adjusted gross income includes compensation for personal services
						  in the amount of $27,500, computed as follows:
Y Corporation 90/120 x $20,000 = $15,000
Z Corporation 60/120 x $25,000 = 12,500
Total $27,500