Services performed partly in New York State

If a New York State nonresident employee performs services partly in the state, only wages for services inside the state are subject to withholding of New York State personal income tax. For purposes of withholding tax, the amount of wages allocable to New York State is that part of the total compensation that the number of days worked in New York State bears to the total number of days worked both in and out of New York State, exclusive of nonworking days, normally considered to be Saturdays, Sundays, holidays, days of absence because of illness or personal injury, vacation or leave with or without pay. However, to figure the earnings of traveling salespersons or other employees whose compensation depends entirely on the volume of business transacted by them, the amount allocable to New York State is that part of the compensation received that the volume of business transacted by them in New York State bears to the total volume of business transacted by them both in and out of New York State.

The nonresident employee should file Form IT-2104.1 with you. You may determine the portion of wages allocable to New York State for withholding on the basis of the portion shown on Form IT-2104.1 or you may determine it based on the preceding year.

However, you must make any necessary adjustments during the year to ensure that the required amount of New York State personal income tax is withheld for the current year.

If the employee reasonably expects that the preceding year’s experience will not apply to the current year, the employee may furnish you with a statement on Form IT-2104.1, estimating the part of wages allocable to New York State, or you may make such an estimate and withhold on that basis. In either case, however, you are required to make the necessary adjustments during the year so that the proper amount of New York State personal income tax is withheld from the employee’s salary for the current year.

You are required to withhold on all wages paid to a nonresident employee who works partly inside and partly outside New York State unless Form IT-2104.1 is filed with you, or you maintain adequate current records to determine the correct amount of wages from New York State sources.

If you pay wages to nonresident employees whose primary work location is outside of New York State and who are expected to work 14 days or fewer in New York State during the calendar year, see TSB-M-12(5)I , Withholding on Wages Paid to Certain Nonresidents Who Work 14 Days or Fewer in New York State, for the Tax Department’s existing policy concerning employer withholding on wages paid to those employees.

Note: An employer may accept a completed Form IT-2104.1 as documentation of an employee’s nonresident status, as long as the employer does not have any actual knowledge or reason to know the certificate is incorrect or unreliable. For more information on Form IT-2104.1, see part K, Form IT-2104.1, New York State, City of New York, and City of Yonkers Certificate of Nonresidence and Allocation of Withholding Tax .

In situations where a nonresident or part-year resident employee whose assigned or primary work location is in New York State performs services for an employer at that location and at a home office located outside of New York State, see TSB-M-06(5)I , New York Tax Treatment of Nonresidents and Part-Year Residents Application of the Convenience of the Employer Test to Telecommuters and Others .