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NYC 1127

I am preparing my first NYC 1127 for a nonresident employee of NY City. Taxpayer retired last summer so he was only a nonresident employee of NYC for part of the year. In looking at the instructions I see the following for partial-year employees: "If you were a New York City employee for part of 2005, you must report that portion of federal items of income and deduction which is attributable to your period of employment by the City of New York." As those that are familiar with the form know there are two columns - the federal amount column and the Section 1127 Employee column. For full year nonresident employees all the joint income from the federal is reported in the federal column and all the nonresident NYC employee's federal income is reported in the Section 1127 column. (Although there is an option to report just the separate income in the federal column.) So when the instructions say to report the federal portion attributable to your NYC employment period do they mean to do this for both columns or only for the Section 1127 column? TIA,

Reply to
Drew Edmundson
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Drew, I haven't spent a lot of time looking at the forms, but I see the ambiguity you reference in the instructions. The point of this exercise, if I understand it, is to calculate the amount of tax the employee would have paid to the city if he/she had been a city resident while employed by the city. So he is treated as if he had been a part-year resident of the city in this case. The result should be the same as if you had completed an IT-203 part-year resident return for the employee, assuming he was a resident during the part of the year when he was a city employee. So -- I think the answer to the question is that 100% of the federal income goes in Col. A., and only the federal income relating to the period of employment goes in Col. B. You calculate the tax as if the taxpayer had been a full-year resident, and then prorate by the ratio of NYC AGI (Col. B) to total AGI (Col. A). If the employee had actually filed an IT 203 and paid tax to the city, the tax paid would be subtracted from the amount due on the NYC 1127. You might try doing a pro forma IT 203, based on the assumption of state and city residence during the period of employment, just to verify your results. Katie in San Diego

Reply to
Katie

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Katie, thank you. I posted this back in late March but it never showed up. A second try actually made it to the group on 3-30-06. Anyway I prepared the form in the manner you described as I could never get anyone on the phone in NY City.

Reply to
Drew Edmundson

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