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Posted by Katie on December 4, 2006, 5:57 pm
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Han wrote:
>> I just noticed today that my wife's paycheck deductions never
>> changed from NY State when we move to CT 4 months ago. She
>> called her HR dept and they told her that her office in is
>> NY State so she still has to pay NY income tax. My HR
>> department changed my income tax to CT and my office is in
>> NY State. Which HR department is right? I've always been
>> under the assumption that you pay income taxes in the state
>> you live not the state you work. If it is the state we live
>> how does my wife rectify the fact that she has been paying NY
>> taxes for the past 3 months?
> <snip>
> There is a difference (since a few years) between NY State and
> NYC (or Yonkers) city income taxes. I work in Manhattan and
> live in NJ, and prior to the change, I had to pay NY State and
> NYC income taxes (as well as some NJ taxes), although I did not
> reside in NYC. The change was that non-residents of NYC now do
> not pay NYC income taxes anymore. NY State still gets its
> exorbitant share, which in NJ counts in some way towards NJ
> income taxes.
Han makes a good point. If the OP and his wife were
residents of NYC before they moved to CT, they were subject
to the NYC income tax. Since they became nonresidents of
NYC, they are no longer subject to the NYC tax.
Of course, if their residence was in NY state but outside
the city before the move to CT, they weren't subject to the
NYC tax either before or after the move.
Here's the history of the NYC "commuter tax":
From 1966 until 1999, New York City imposed an income tax on
nonresidents who worked in the city -- a so-called "commuter
tax." In 1999 the Legislature amended the law to exempt New
York State residents from the tax, while continuing to apply
it to nonresidents of the city who were residents of other
states. The New York Court of Appeal ruled that the
amendment violated the Privileges & Immunities and Commerce
clauses of the U.S. Constitution _City of New York, et al.,
v. State of New York, et al._, NY Court of Appeals, 94 NY2d
577, 730 NE2d 920, 709 NYS2d 122. The legislation that
enacted the exemption for NYS residents contained a clause
specifying that, if the exemption was ruled
unconstitutional, the commuter tax would be automatically
repealed in its entirety. As a result, the tax was
retroactively repealed as of July 1, 1999, the date on which
the amendment took effect.
Residents of the city still pay the resident personal income
tax. But nonresidents are not subject to it.
Katie in San Diego
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