Hi! I recently filed my New York taxes for the 2021 tax year, and this is intended to document my experiences with it. Like in 2019, I filled out the forms by hand and used tax software solely for e-filing.
This is not intended to be a guide. I don’t know anything about taxes. I’m not a tax professional. I’m just some guy telling my story, and you’d probably be a fool to listen to it. This is provided for informational purposes only, and you should consult a tax professional before you follow any instructions you find online. I do not claim to know anything about taxes.
That being said, since it’s tax season again, I have attached a copy of a sample tax return using 2022 forms, with similar numbers to my 2021 return. Maybe you can sanity check the information provided.
I think the numbers are right. Hopefully. The W-2’s say 2023 because I couldn’t find fillable 2022 forms, but I’m sure that’s fine.
See also the previous article on California taxes.
If you’re still bored after reading all of that, there is another companion article for when the CRA comes knocking and says your return is under review.
About Me
For my 2021 return, I:
- Was in the US for 4 months (September-December) of 2021 on a J-1 visa
- Was a non-resident of both the United States and New York for tax purposes
- Was a non-resident of New York City for tax purposes
- Was a resident of Canada for tax purposes
- Did not qualify for any IRS Free File offers
- Was an employee of a company (not a contractor), receiving a W-2
- Had no US investments
- Had accommodation maintained for me by my employer
- A student at the University of Waterloo, but not on an official work term
Software
As I mentioned in my last post I have since discovered that TaxAct and other preparers spend millions of dollars lobbying against making tax filing simpler. This year, I did some research and ended up going with OLT, a pretty cheap solution that got the job done. Admittedly, the interface is a little outdated and the questions are almost exactly what you would fill out if you were to do your taxes by hand, but that’s all I needed.
I ended up accidentally paying for the premium edition, costing me a cool $15.90, but I should have been able to get away with the free edition for just $9.95. Either way, it’s a hell of a lot cheaper than what TaxAct or TurboTax would have tried to charge.
And yes, I really did spend hours trying to figure out how to save $50 bucks. It was a matter of personal principle — nearly life and death. please you have to understand….
Important Forms
- Federal: 1040-NR
- Federal: 1040-NR Schedule A
- Federal: 1040-NR Schedule OI
- Federal: Form 8843
- State: IT-203
- State: IT-203-B
Federal Forms
Filing federal forms was pretty much exactly the same as when I had filed in 2019, so if you’re interested I would encourage you to read my previous article instead :)
One caveat: I didn’t make any donations this year, so I did not itemize those deductions. However, I was withheld in excess of $10,000, and as such could only claim $10,000 on Schedule A, line 1b (which instructs you to enter the lesser of state taxes paid or $10,000).
IT-203
The IT-203 is New York’s version of California’s 540NR, and it is largely similar in terms of “idea”, as far as tax filing can have “ideas”. The key difference between New York and California is that New York City has a city tax on top of the normal federal and state taxes. The tax rate is around an additional 3–4% and joins New York City with the City of Yonkers in the only two cities levying additional income taxes on New York State residents. Better than the 848 (at time of writing) taxation jurisdictions in Ohio, I suppose.
I will admit that I used TaxAct to double check my paper. Perhaps I didn’t quite understand the software (definitely possible) or I missed a few buttons (also possible), but the software identified me as a part-year resident due to living in New York City, resulting in it telling me that I owed additional New York City taxes that were unpaid during my internship. Needless to say, this sent me d̶o̶w̶n̶ ̶a̶ ̶r̶o̶a̶d̶ ̶t̶o̶ ̶t̶h̶e̶r̶a̶p̶y̶ on a rabbit chase frantically reading through more tax documents to see whether I had messed up or had entered information incorrectly.
My most visited website that month ended up being the Frequently Asked Questions page for New York State Personal Income Tax; specifically, “What are the rules for New York City residency?”. I clearly met neither test for being a resident, and so convinced myself that I was a nonresident.
In hindsight, it wouldn’t make sense to be a resident of New York but a nonresident for the federal return. In any case, I didn’t meet the test of having a domicile in New York nor did I have a permanent place of abode.
Unfortunately, OLT not being quite as convinced as I was, smiled and proudly declared me a part-year resident. It seems that in translating the paper form, Line H of the IT-203 asks “Did you or your spouse maintain living quarters in NYS in 2021?”. OLT (and TaxAct, for that matter) seem to have interpreted this question as “How many months did you spend in New York City?”, with any answer greater than 0 marking you a part-year resident. It was back to the paper forms for now to double check my work.
For this question, I initially answered: “of course not silly tax form, the company paid for it, not me or my nonexistent spouse”.
Turns out, the instructions clearly indicate that this question is really asking: “Did you or your spouse maintain or pay for living quarters in NYS in 2021 that were suitable for year round use and available for your use, or did you have any New York State living quarters maintained for your primary use by another person, family member, or employer, regardless of whether you lived in those aforementioned living quarters?”. Duh. Talk about leaving out critical information.
So yes, I should tick the “yes” box since I met the second condition of “employer maintaining quarters in NYS”. At least the instructions are clear about filling out form IT-203-B if this was the case.
The rest of the interesting lines were filled out as follows:
- Personal information: My Canadian address
- New York State county of residence: NR
- School district name: NR
- Line D1: No (the instructions here state to mark the same answer as Schedule B on your federal 1040, which I did not file)
- Line F: E4 (nonresident code)
- Line H: Yes
- Line 1, 19a, 23, 32: Income as reported on my W-2
- Line 33: Standard deduction, $8000
- Line 38, 44, 50, 58: Number computed from the New York State 2021 Tax Tables, but I’m starting to think I’ll just get the software to do this one for me
- Line 62: As reported on my W-2, box 17
- Line 67, 68b: Refund!
IT-203-B
This form is a worksheet used by both nonresidents and part-year residents in order to determine what percentage of the year New York is able to claim income taxes for. For my purposes, the only relevant section was “Schedule B — Living quarters maintained in New York State by a nonresident”.
Since corporate housing was only available for my 4 month stay, I did not mark the box asking if those quarters were maintained for the full year. I listed the address of the housing in the provided table.
Finally, the number of days spent in New York State in this tax year actually refers to the number of days physically spent in New York, which is somehow different than when Schedule OI asks for the number of days “you are physically present in the country” (see my previous article for more on this curious definition, including my mental breakdown). IT-203-B cares about the days you were truly, physically present in the state, without any fun exceptions. Literally the number of days. I never thought I would have to clarify that “days you are physically present” doesn’t always mean “literally present”… but here we are.
That’s all for this form! OLT did not automatically provide this form, but after manually looking it up in the software and finding it, it correctly recognized my nonresident status and updated my tax owing. It was only here that I could finally accept my nonresident status, and was able to efile my return.
Canada
My Canadian taxes were filed the exact same as in 2019.
Addendum: If this is your last coop term in the US the year before you move there for fulltime, consider making the maximum allowable RRSP contribution to save on some tax. For example, I contributed the maximum in February of 2022, before withdrawing it immediately in May of 2022 before I left, thus reducing my taxable income for 2021 and not incurring taxes on withdrawal as I had no Canadian income in 2022.
Finally done with filing, OLT (like a lot of other software) provides a nice dashboard showing the status of my refund. The refund was processed within a week of filing. Overall I had a really good experience with OLT, but I definitely wouldn’t recommend it if just looking at a tax form makes you faint.
FAQ
Some common questions that pop up on the US side.
Am I a resident for US tax purposes?
No. Not on a J-1 anyways. You should be neither a resident of the state nor federally.
Do I want to file Form 8840?
No. However, you should fill this out if you pass the substantial presence test (183 days spent in the US EXCLUDING your J-1 days).
How many days did I spend in the US?
If your only time was on J-1, the total number of days you spend for the purposes of Schedule OI is 0. For the purposes of Form 8843, enter the actual number of days, then exclude the time spent on J-1.
Did I have wages exempted by a tax treaty?
No. All income was US-sourced and is therefore subject to US taxes.
Was I a student or did I have any student-related expenses?
No. As a J-1 visitor on exchange you are classified as a trainee, not a student, despite being a student. This question refers to whether you are currently attending a US-based institution.
Can I deduct moving expenses?
Not for the purposes of Form 3903, which is for active duty US military. Last I checked, I wasn’t enlisted. You may be able to deduct moving expenses on the Canadian side via form T1-M, but only if those expenses are not covered by the company.
Did I have a valid Social Security Number for EIC/Employment purposes?
Yes. I was allowed to work. However, I cannot claim the Earned Income Credit as I was not a resident.
You made it to the end 🎉🎉🎉! Thanks for reading. It’s always fun to write about taxes and various regulations around them. As I’m graduating soon, this will be the last article I write about filing taxes for my US internships, but I might decide to write something in the future about leaving Canada to start fulltime work in the US and whatever tax implications that might have. Until then, happy tax season!
For more relevant readings, see
