NYS/NYC Residents during the stay home order

I have several clients that live and work in Manhattan (NYC) and have summer homes in Connecticut, New Jersey & Westchester County New York . Now due to COVID-19 they are all working remotely from homes outside of NYC and in some situations NYS.
They are all questioning the residency status for 2020. They are requesting to be treated as a resident outside of NYC and not pay the NYC resident tax or in the case of Ct. and NJ the NYS resident tax.

Has anyone in the group had a similar situation ?

Isn't their absence from NYS/NYC temporary

due to COVID-19

?
As in, they have not given up their NY domicile and intend to return to NY.

good question. Several of the clients have told me that their employers will not re-open the office until December. So that being said temporary equals 8 to 9 months. ( more then 183 days)

Has anyone in the group had a similar situation ?

No, but I would be very careful here. NY and CA are notorious for residency audits.

If it's not a bona fide move, and is temporary in nature, I wouldn't feel comfortable signing a return that suggests otherwise.

https://www.tax.ny.gov/pit/file/pit_definitions.htm

So that being said temporary equals 8 to 9 months. ( more then 183 days)

Sometimes "temporary" can mean years in the case of a work assignment.

Agree with Man....NY is aggressive in its defense of tax revenue. If you maintain a residence in NY, you have an uphill battle. There will be litigation on this for sure but how fast that will come Is another story. Will NYS be lenient due to Covid or will it continue its normal stance. Not sure Cuomo is that “nice”. This is a topic of discussion in many webinars for us NYS preparers. It will not be fun for sure.

From a FB group I belong to:

https://news.bloombergtax.com/daily-tax ... -for-grabs

I have several situations were a NYC resident that works in NYC is living for several months with family in Westchester county. Do they pay the NYC resident tax during the living period in Westchester.
This is not an out of state situation.

The link I posted is very helpful.

Did you notice this towards the bottom:

New York City and Yonkers
For the definition of a New York City or Yonkers resident, nonresident, and part-year resident, see the definitions of a New York State resident, nonresident, and part-year resident above and substitute New York City or Yonkers in place of New York State.

Determination of NY residency emphasizes domicile rather than physical location. To make the case for non-residency the intent to make it permanent has to be shown.

NCCPAP is actually having a seminar on this subject next month:

New York City Domicile and Residency Issues in the Covid-19 Era
1 CPE Tax
Wednesday, August 12, 2020 9 AM - 10 AM (ET)

SPEAKER: Timothy Noonan, Esq.

LOCATION: Webinar

PRICING: $20 member / $30 nonmember


LEARNING OBJECTIVE: One of the most commonly asked tax question we've all received over the past few months goes something like this: "I have not been in New York City since March 2020. Can I avoid New York City taxes this year?" In this session, we'll try to answer this question, looking at a variety of different factual scenarios and circumstances. We'll also cover ancillary issues around the application of New York's telecommuting rules for nonresidents working remotely from out-of-state locations.

I signed up for this NYCCPAP on Wednesday . Looks like they will address the NYC resident tax issue.

I took a class a couple of weeks ago. If a NR employee works for a NY employer both within and without NY, the % of wages subject to state tax is based upon the % of days in NY to total days. BUT days worked from home are treated as NY workdays unless the the employee was out of state by necessity, not for his own convenience.

The million $$ question is whether the employee can say that the shelter in place order causes days out of state to count as working out of state by necessity. So if your client is a resident, all income is taxable in NY. If your client is a NR, the wage income may be taxable in NY regardless unless you can show that your client worked out of state by necessity.

Most of my client questions pertain to the NYC Resident Tax, For example the client lives in NYC and works for a NYC employer that has closed the offices in NYC and instructed employees to work at home remotely.
The employees go to stay with family or friends in Westchester County which is New York State.
Does the employee pay the NYC resident tax ?

What role can the CPA play in the event of COVID-19 business liability litigation?

Most of my client questions pertain to the NYC Resident Tax, For example the client lives in NYC and works for a NYC employer that has closed the offices in NYC and instructed employees to work at home remotely.
The employees go to stay with family or friends in Westchester County which is New York State.
Does the employee pay the NYC resident tax ?

I think NYC operates under the same rules as NYS with regard to this issue. NYS issued some guidance in October when it updated its FAQs. These FAQs address NYC toward the end.

https://www.tax.ny.gov/pit/file/nonresident-faqs.htm#telecommuting

An employee whose employer's office is in NYS but telecommutes from home out of NYS will still have wages taxed by NYS unless the employer establishes "a bona fide employer office" (BFEO) in their home.

https://www.hodgsonruss.com/newsroom-publications-12823.html

TSB-M-06(5)I sets forth the criteria to determine if a home office is "a bona fide employer office".

https://www.tax.ny.gov/pdf/memos/income/m06_5i.pdf

I suspect most employees who left NYC to telecommute from home, or another location, are going to continue to be taxed by NYC absent meeting the criteria for a BFEO.

Hodgson Russ has put together a state guide to telecommuting here:

https://www.hodgsonruss.com/assets/htmldocuments/Telecommuting_5.22.20.pdf