New york non resident return

[lmlcpaservices]

I have a client who has New York state withholdings on his W-2.  This is not New York source income, he does not live in the state, does not maintain an office in the state.  I need to allocate zero income to New York, but when I do that ProSeries is giving me this error - on the New York state return - "Alloc Wks" line 1 - Wages, salaries, etc - column a from federal return $64,500 column b nothing, column c auto filled from column a/federal return, $64,500, column d - i type in zero and the cell goes red and says "allocation worksheet for PY/NR: Wages, salaries, etc Col D New York wages were reported on federal Form W-2 but no wage income has been allocated to New York.  This will cause the efiled return to be rejected by New York state. Any help?

[itonewbie · Accepted solution]

Before we conclude it is not NY-source income, could you confirm whether your client was telecommuting for a NY employer and working in his home state not for the convenience of his NY employer?

If not, did your client work with his employer to issue a W-2C?

[rbynaker]

Yeah, lots of possibilities.  Telecommuting.  Vesting of stock options granted while working in NY.  Various bonus plans based on performance while working in NY.  Etc.

Are we having fun yet?

[itonewbie]

True.  I didn't account for accrued income as I presumed those basic points would have been considered but never hurt to check.

[rbynaker]

New York has some pretty crazy rules on this.  I'd first find out why the employer thinks this is NY source income.