New York State Department of Taxation and Finance Nonresident Students and Scholars Spring 2008 Workshop

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New York State (NYS) Income Taxes If you did not have income and only need to file Form 8843 to the IRS …… then, you do not need to file a New York State personal income tax return.

NYS Conforms with Internal Revenue Service  New York State (NYS) complies with ALL tax treaties that the Internal Revenue Service uses.  Your Federal (IRS) Taxable Income is the starting point in computing your New York State income tax.  New York-Source Income is Taxable Income you received in New York State. Note: If you earned income in any other state in the U.S., please consult that state for income tax filing requirements

New York State Income Tax for Nonresident Alien Students & Scholars  Almost all nonresident alien students and scholars are in New York temporarily for a particular purpose and, therefore, are nonresidents for income tax purposes.  However, if you do not have a domicile (a place you intend to return to as your permanent home) outside New York State and you maintained a permanent place of abode (residence) in New York State, you may be required to file other New York State income tax returns.

Nonresident Regulations for Personal Income Taxes Section (e)(1) of the Personal Income Tax Regulations defines a "permanent place of abode" as: a dwelling place permanently maintained by the taxpayer, whether or not owned by the taxpayer. However, a place of abode, whether in New York State or elsewhere, is not deemed permanent if it is maintained only during a temporary stay for the accomplishment of a particular purpose.

Nonresident Regulations for Personal Income Taxes If the stay in New York is temporary and the stay in New York is to accomplish a particular purpose, the place of abode is not deemed permanent. Section (e)(1) of the Regulations contemplate that the term "temporary" means a fixed and limited period as opposed to a stay of indefinite duration.

Nonresident Regulations for Personal Income Taxes Section (e)(1) of the Regulations contemplate that the phrase "particular purpose" means that the individual is present in New York State to accomplish a specific assignment that has readily ascertainable and specific goals and conclusions, as opposed to a general assignment with general goals and conclusions.

Do you have to file a New York State IT-203 nonresident income tax return? Yes, if you meet any of the following conditions: :  You had New York-source taxable income and your New York adjusted gross income (Federal amount column) is more than: $7,500 for single individuals $3,000 if single & can be claimed on another taxpayer’s IRS tax return $7,500 if married & filing separate tax returns  You want to claim a refund.

Which NYS tax form do I need to file?  Almost all nonresident alien students /scholars who file a NYS income tax return will need to file: Form IT-203, “Nonresident and Part-year Resident Income Tax Return” and Form IT-2 for wages (if W-2 received) You DO NOT need to attach ANY of the federal (IRS) forms or schedules unless you carried on a trade or business in New York State for which special rules may apply.

Form IT-203 Filing Status: Guidelines for Nonresident Aliens  If you checked “single” on your 1040NR-EZ or 1040NR and you are required to file Form IT-203, you MUST check “single” as your filing status on your Form IT-203.  If you checked “married” on your 1040NR-EZ or 1040NR, you must check “married filing separate” as your filing status on your Form IT-203. (“Married filing joint” is not allowed)

IT-203 General Guidelines  Unlike the IRS tax return, NO PERSONAL EXEMPTION is allowed for you or your spouse on Form IT-203.  You are allowed the SAME amount of DEPENDENT EXEMPTIONS as claimed on your IRS tax return.  Unlike the IRS tax return, you may ALL claim a STANDARD DEDUCTION.

The NYS Standard Deduction Amount  2007 NYS standard deduction amount: $7,500 for single individuals $3,000 if single & can be claimed on another taxpayer’s federal (IRS) return $7,500 if married & filing separate tax returns

IT-203 General Guidelines  If any part of your scholarship or fellowship was included as INCOME (for room and board) on your IRS tax return, then enter it on the line for OTHER INCOME (line 15) on your NYS tax return, IT-203.  If you included your 2006 State Income tax refund as income on your IRS tax return, you can subtract it (line 24) on your NYS tax return, IT-203.  Only enter the taxable income from the IRS tax return onto the NYS tax return, IT-203

W-2 received from the State of New York

W-2 information from the State of California

What do I do with the state copy of the W-2?  If you are filing a NYS tax return, and have a W-2(s), transfer your W-2 information onto NYS Form IT-2.  DO NOT attach a W-2 to your NYS tax return (IT-203). Keep the state copy for your records.  DO NOT forget to complete the NYS withholding information on the IT-2.  Attach the IT-2 to your IT-203. Note: Obtain Form IT-2 from

Transfer ALL W-2 Information to Form IT-2 {

You must complete IRS Form 1040NR-EZ or 1040NR before filling out Form IT-203.

Federal Form 1040NR-EZ – From Form 1040NR or NR-EZ you will transfer the taxable income amounts only Line 6 includes Scholarship and wages reported on Form 1042-S and is NOT transferred to the NYS form IT-203. This amount is exempt from treaty. This column, lines 3-10, is taxable income and transferred to NYS return Federal amount Column

 First, you must compute a base tax on ALL your taxable income as shown on the IRS tax return that is transferred to the NYS federal amount column.  Once you compute the tax, then you must determine how much of your “computed tax” is attributed to NYS sources.  To determine this, you divide your NYS income by your federal income. Then take that answer and multiply it by the tax you computed. This is your NYS income tax. How are NYS Nonresidents are Taxed?

Completing IT-203

Complete Lines 1 through 18. Transfer the amounts from Form 1040NR-EZ or 1040NR to the Federal Amount column and income you earned in New York State (New York-source income) to NYS amount column.

Use your Federal Adjusted gross income then determine your NYS adjusted gross income. If you included your state refund for tax year 2006 as income on Form 1040NR-EZ or 1040NR, subtract it on line 24 to arrive at NYS taxable income. __________________________________________________________________________

Line 38 NYS taxes – see next slide for Tax Chart

If you have a dollar amount on line 37 (NYS taxable income) find your income tax in the tables beginning on page 69 of the IT-203 instructions

Line 39 – household credit

Who is entitled to a NYS household credit?  Cannot be claimed on another person’s federal tax return and if your income on form IT-203: Single and your federal amount column (line 18) is $28,000 or less Married and federal amount column (line 18) is $32,000 or less  The household credit is NOT refundable and will only reduce your NYS tax.  See page 40 in the IT-203 Instructions booklet for household credit chart

NYS household credit chart for a single person that CANNOT be claimed on another taxpayer’s federal return

Computing NYS tax – line 44 multiplied by line 45

New York State and Local Sales and Use Tax You owe a sales and use tax if: You purchase property or a service delivered to YOU in New York State without payment of sales and use tax (Ex. Internet, catalog purchases). Most tangible personal property is subject to New York and Local Sales tax. Examples: clothing, jewelry, electronic equipment, furniture, prewritten software, books (excluding text books), compact disks, videos, etc. For more information, see Publication 774 – Purchasers Obligations to pay Sales and Use Tax Directly to the Tax Department, Questions and Answers

Line 56 (IT-203) is used to report the amount of sales tax you owe. If you do not owe sales tax, enter “0” on line 56. On page 64 of the IT-203 Instructions booklet, there are instructions for computing the amount of use tax due if you owe. If you DO NOT owe Sales and Use tax, enter a ZERO on line 56. DO NOT leave it Blank.

page 4 of IT-203 – line 62 is from IT-2

Sign and Date Return JOY KIM Student 2/19/08

Mail your New York State tax return by April 15, 2008 Mail to: State Processing Center PO BOX Albany, New York

Additional information for discussion Reporting Sales Tax ONLY  If you are not required to file a New York State personal income tax return (IT-203), you may report the amount of sales and use tax on form ST-140.  This form is due April 15, 2008.

Income Tax Filing TIPS  Remember to: Sign your income tax return. Enter your Social Security Number on your income tax return. Complete Form IT-2 from your W-2 information and attach the IT-2.

Thank you for coming! The material included in this presentation is intended for nonresident alien students and scholars in New York State who are in the U.S. on F-1 or J-1 visas. For more information, please refer to NYS Division of Taxation and Finance forms, instructions and publications.