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Old 04-16-2015, 12:04 AM
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Estimated Taxes for New York

Hello:

I moved to New York in the middle of last year. I started working in Connecticut shortly thereafter. My employer only takes Connecticut taxes out of my paycheck and will not take out New York taxes.

I went to H&R Block this year to have my taxes prepared and ended up owing about $1500 in taxes to New York based on being here about five months. To avoid a similar situation in 2015, my tax guy told me to have an additional amount withheld from Connecticut. He did not mention estimated payments.

In fact, I just learned about estimated payments today and am slightly confused by the advice I received. Why would I withhold the additional amount from CT when that amount should be going toward estimated payments? Won't the tax professional's advice only cause me penalties and interest?



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Old 04-17-2015, 09:10 PM
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I moved to New York in the middle of last year. I started working in Connecticut shortly thereafter. My employer only takes Connecticut taxes out of my paycheck and will not take out New York taxes.=====>In that case,as there is no reciprocal agreements between NYS and Connecticut, I guess , you need to report Connecticut source income to Connecticut as a non- resident of the state and you need to claim tax paid to Connecticut on your NYS return as a part year resident of NYS. You would generally only take a credit for taxes paid to Connecticut on your part year resident return if the amount of income that is being reported as taxable to the NYS state includes wages that were actually taxed by Connecticut.

I went to H&R Block this year to have my taxes prepared and ended up owing about $1500 in taxes to New York based on being here about five months.=====>>You may owe tax to NYS even if you paid ax to Connecticut on your Connecticut source income as a non resident of the state ASLONGAS NYS tax rate (so tax liability based on NYS tax rate after the tax credit on Connecticut tax is still higher than your Connecticut state tax credit );

To avoid a similar situation in 2015, my tax guy told me to have an additional amount withheld from Connecticut. He did not mention estimated payments. ========>>As said, aslongas NYS tax rate is higher than that in Connecticut, so after you claim your Connecticut tax credit, you may owe tax to NYS, to avoid this situation, you may adjust your W4 with your employer in Connecticut to have your Connecticut employer withhold additional amount from your paychecks . In general, as W2 regular employee, you may have your employer withhold additional amount from your paychecks by adjusting your W4 instead of paying quarterly estimated taxes to Connecticut. Most W2 employees who have federal and state income taxes, fica taxes withheld from income as part of payroll generally do not have to pay estimated taxes on that income. These withholdings can be seen at the end of the year on W-2 statements. However when an employee has additional sources of income, such as a side consulting business, rental property income, or significant stock transactions or dividend payments, estimated tax payments may be required.

In fact, I just learned about estimated payments today and am slightly confused by the advice I received. Why would I withhold the additional amount from CT when that amount should be going toward estimated payments? Won't the tax professional's advice only cause me penalties and interest?======>>>>>>>>>Even if your employer withhold taxes from your paychecks, your NYS tax liability can be still higher than taxes withheld in CT, in this case , you need to request your CT employer to withhold more from your paychecks to avoid paying tax to NYS. As said above, you actually do not need to pay quarterly estimated taxes. Please read above.To increase the amount of federal/state income tax withheld from your paycheck,you need to file a new Form W-4 with your CT employer to reduce the number of allowances you claim on the form. . You're required to fill out this form when you start working for an employer, and you can fill out a new one whenever your circumstances call for a change in the amount of withholding or you may
request an "additional amount" to be withheld from your paycheck on line 6 of W4. This makes it fairly easy to determine the amount of the increase when you file Form W-4.



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