IT-203: Nonresident & Part-Year Resident Return

Who Must File Form IT-203

You are legally obligated to file a New York State return (Form IT-203) if you meet any of the following conditions:

• Nonresident of New York: You earned New York source income during the tax year.
• Part-Year Resident of New York: You changed your domicile into or out of New York State during the year.
• You are required to file a federal return and had any income from New York sources.

Examples of New York source income include:

• Wages for work performed physically in New York State.
• Net earnings from a trade, business, or profession operating in New York.
• Income from a partnership, S corporation, LLC, or estate with New York activities.
• Rental income from real property located in New York.
• Gains from the sale of real property located in New York.
• Certain lottery winnings from the New York State lottery.

Determining Your Residency Status

Misclassifying your status is the most common and costly error. New York defines residency in two distinct ways.

A. Domicile

Your domicile is your permanent, primary home — the place you intend to return to and remain indefinitely. You can have only one domicile at a time. High-income individuals claiming a change of domicile to a no-tax state (e.g., Florida) are frequent audit targets. Factors New York examines under the “Closer Connection” test:

• Home: Size, value, and use of your NY residence vs. out-of-state residence.
• Active Business Involvement: Location of your business and investments.
• Time: The number of days spent in New York versus other locations (a daily log is essential).
• Items of Significant Value: Where you keep family heirlooms, art collections, wills, and pets.
• Family Connections: Where your spouse and children reside.
• Community Ties: Voter registration, driver's license, car registration, club memberships, place of worship.

B. Statutory Residence (The “183-Day Rule”)

Even if your domicile is outside New York, you are considered a New York Statutory Resident and taxed on your worldwide income if you meet both of these conditions:

• You maintained a permanent place of abode in New York (e.g., an apartment, house, or room you can use year-round) for substantially all of the year (generally 11 months or more).
• You spent 183 days or more in New York during the tax year. Any part of a day counts as a full day.

Example: A corporate executive domiciled in New Jersey maintains a condominium in Manhattan and is physically present there for 190 days while working. This individual is a New York Statutory Resident and owes New York tax on all income, worldwide.

C. Part-Year Resident

You are a Part-Year Resident if you changed your domicile during the tax year.

• You are taxed as a resident on all income (worldwide) earned during the period you were domiciled in New York.
• You are taxed as a nonresident on only New York source income earned during the period you were domiciled outside New York.

The Allocation Rules

For Nonresidents: Tax applies only to New York source income.

For Part-Year Residents: Resident period — 100% of worldwide income. Nonresident period — only New York source income.

Key sourcing rules:

• Wages/Salaries: Based on where the services are physically performed. Use Form IT-203-B to calculate the allocation if you worked both in and out of New York.
• Business Income: Apportioned using a three-factor formula (property, payroll, receipts) detailed on Form IT-203-S.
• Rental Income: 100% sourced to the property's physical location.
• Capital Gains: Gains from New York real property are NY source. Gains from intangible assets (stocks, bonds) are generally not NY source for nonresidents.
• Pass-Through Income (K-1s): The entity (partnership, S-corp) should provide you with a NY-specific allocation on a form like IT-204-ATT.

The Telecommuting Trap

This is a critical and often misunderstood rule. If your assigned primary office is in New York, but you perform work remotely from another state for your own convenience (not a necessity of the employer), New York may deem 100% of your wages to be New York source income, taxable by the state — even if you never set foot in New York during the tax year.

Penalties for Non-Compliance

• Failure to File: 5% of tax due per month (maximum 25%).
• Failure to Pay: 0.5% of tax due per month (maximum 25%).
• Substantial Understatement: 10% of the underpayment if it exceeds the greater of $1,000 or 10% of the tax required to be shown.
• Fraud: Penalty of 100% of the underpayment.
• Interest: Accrues daily on any unpaid tax from the original due date.

Frequently Asked Questions

I live in New Jersey and work in a New York City office three days a week. What do I file?

You are a New York nonresident. File Form IT-203 and use Form IT-203-B to allocate 3/5 of your weekly wages as New York source income. You will also file a New Jersey resident return and claim a credit for taxes paid to New York.

I sold my home in NYC and moved to Florida in June. How do I file?

You are a part-year resident. You will file Form IT-203, reporting all income from January 1 until your move (including the home sale gain) as a resident. Any income after establishing a Florida domicile is only reported if it is New York source income.

What documentation do I need to prove I was not in New York for 183 days?

Maintain a contemporaneous daily log (diary, calendar, or app). Corroborate with credit card statements, E-ZPass records, phone location data, airline tickets, and hotel receipts. The burden of proof is on you in an audit.

I am retired and receive a pension from my former New York employer, but I now live in North Carolina. Is this taxable by New York?

For a nonresident, pension income is generally not New York source income and is not taxable. An exception exists if contributions were made when you were a NY resident and were not subject to NY tax at that time.

My partnership operates in multiple states. The K-1 I received only shows federal amounts. How do I report it?

Contact the partnership's tax preparer and request the New York state allocation schedules. You cannot accurately complete Form IT-203 without the NY-specific amounts for your share of income, deductions, and credits.

I own a second home in the Adirondacks but my domicile is in Ohio. I spent 150 days there. Am I a statutory resident?

No, because you did not reach the 183-day threshold. However, you must still file as a nonresident and pay NY tax on any NY source income (e.g., if you rented the property).