If someone is a UK citizen who files a federal Form 1040NR as a nonresident alien, but qualifies as a New York State and City statutory resident because they're present here more than 183 days, what income does New York tax?

Plain-English summary

The Petitioner is a citizen of the United Kingdom who maintains a permanent place of abode in New York City. Because he was appearing in a New York City theatrical production during 2011, he expected to be present in New York City for more than 183 days that year - which, combined with the permanent place of abode, made him a New York State and New York City statutory resident under Tax Law § 605(b)(1)(B) and § 1305(a)(2). At the same time, he anticipated filing his 2011 federal return as a nonresident alien on Form 1040NR, since federal law treats resident and nonresident alien status as a separate classification from state residency concepts.

The Petitioner asked whether, given that mismatch, New York would tax him only on the items of income includable in his federal adjusted gross income - that is, the amount on line 35 of his 2011 Form 1040NR - rather than on some broader measure of worldwide income.

The Department agreed. Tax Law § 612(a) defines a resident individual's New York adjusted gross income as federal adjusted gross income, with certain modifications. Under IRC § 871(b), a nonresident alien engaged in a US trade or business is federally taxable only on income effectively connected with that trade or business, and that is the figure that flows into federal adjusted gross income on Form 1040NR. Because the Petitioner would file federally as a nonresident alien with effectively-connected income reported on Form 1040NR, and would separately be a New York State and City statutory resident required to file Form IT-201, his 2011 New York adjusted gross income would simply be that federal adjusted gross income figure, adjusted for any modifications that apply under Article 22 of the Tax Law. The Department expressly noted it was not passing judgment on whether nonresident alien classification was correct for federal purposes - it assumed that classification as a fact for purposes of the opinion.

What this means for you

Foreign nationals who are NY statutory residents but file as nonresident aliens federally

Being a New York statutory resident (via a permanent place of abode plus more than 183 days present) does not automatically expose you to New York tax on worldwide income. If you are also entitled to file federally as a nonresident alien - taxed only on income effectively connected with a US trade or business - your New York adjusted gross income starts from that same federal AGI figure (the amount from your Form 1040NR), not from a broader worldwide-income base, subject to Article 22 modifications.

Accountants and tax professionals

When a client is a statutory resident who also qualifies as a federal nonresident alien, confirm the Form 1040NR is properly completed and used as the starting point for the client's Form IT-201. This opinion does not validate the client's nonresident alien classification itself - that determination is made under federal law, and the Department here expressly declined to opine on its correctness.

Common questions

Q: Can someone be a New York statutory resident and a federal nonresident alien at the same time?
A: Yes. State statutory residency (under Tax Law § 605(b)(1)(B) and § 1305(a)(2)) and federal resident/nonresident alien classification (an immigration-adjacent federal tax concept) are determined under separate rules and don't need to match.

Q: If someone is a NY statutory resident, is all of their worldwide income taxed by New York?
A: Not necessarily. If the person is properly classified as a federal nonresident alien, their federal adjusted gross income already reflects only income effectively connected with a US trade or business under IRC § 871(b), and that narrower figure is what carries over as the starting point for New York adjusted gross income under Tax Law § 612(a).

Q: What form does a New York statutory resident in this situation file?
A: Form IT-201, using the federal adjusted gross income reported on the federal Form 1040NR (line 35 in the 2011 version) as the starting point, adjusted for any modifications under Article 22 of the Tax Law.

Q: Did the Department confirm that the Petitioner was correctly filing as a nonresident alien for federal purposes?
A: No. The Department expressly stated it expresses no opinion on the correctness of that federal classification and relied on the facts as the Petitioner described them.

Citations and references

• Tax Law § 612(a) - New York adjusted gross income of a resident individual equals federal adjusted gross income, with modifications
• Tax Law § 605(b)(1)(B) - New York State statutory resident definition
• Tax Law § 1305(a)(2) - New York City statutory resident definition
• IRC § 871(b) - a nonresident alien engaged in a US trade or business is taxed on income effectively connected with that business
• Tax Law Article 22 - modifications applicable in computing New York adjusted gross income

Source

• Landing page: https://www.tax.ny.gov/pubs_and_bulls/advisory_opinions/income_ao_2010.htm
• Opinion: https://www.tax.ny.gov/pdf/advisory_opinions/income/a10_7i.pdf

Original ruling text

New York State Department of Taxation and Finance

Office of Counsel
Advisory Opinion Unit

TSB-A-10(7)I
Income Tax
September 7, 2010

STATE OF NEW YORK
COMMISSIONER OF TAXATION AND FINANCE
ADVISORY OPINION

PETITION NO. I100527A

On May 27, 2010, a Petition for Advisory Opinion was received from name and address redacted.
The Petition asks whether a citizen of a foreign country who files as a nonresident alien1 for Federal income
tax purposes for taxable year 2011, but is a statutory resident of New York State and New York City, is
subject to 2011 New York State and City personal income tax only on those items of income includable in
his Federal adjusted gross income, i.e., line 35 of his 2011 Federal Form 1040NR.
We conclude that Petitioner’s New York adjusted gross income subject to New York State and
New York City personal income tax for taxable year 2011 will only include those items of income
includable in determining his Federal adjusted gross income for tax year 2011.
Facts
Petitioner is a citizen of the United Kingdom and maintains a permanent place of abode in
New York City. In connection with Petitioner’s appearance in a New York City theatrical performance
during taxable year 2011, Petitioner anticipates being present in New York City for more than 183 days
during taxable year 2011.
Analysis
Under Tax Law §612(a), the New York adjusted gross income of a resident individual means his or
her Federal adjusted gross income as defined under the laws of the United States for the taxable year, with
certain modifications. For taxable year 2011, it is contemplated that Petitioner will be a New York State
and City statutory resident individual as defined in Tax Law §605(b)(1)(B) and §1305(a)(2).
Federal tax law distinguishes between resident aliens and nonresident aliens. Categories established
for immigration purposes do not necessarily coincide with those established for tax purposes. The
classification between resident and nonresident alien is significant, since a resident alien is taxed like U.S.
citizens on worldwide income, and a nonresident alien is taxed only on income from U.S. sources, using
special tax withholding, reporting and filing rules.
It is assumed for purposes of this Opinion that Petitioner is entitled to file as a nonresident alien for
Federal tax purposes for taxable year 2011 although we express no opinion on the correctness of this
classification.
Pursuant to Internal Revenue Code §871(b), a nonresident alien individual engaged in a trade or
business shall be taxable as provided in section 1 or 55 on his or her taxable income which is effectively
connected with the conduct of a trade or business within the United States. Furthermore, in determining

1

For purposes of this Opinion the Department relies upon the facts contained within Petitioner’s request. The Department does not
make a determination as to the appropriateness of Petitioner’s federal income tax filing status for taxable year 2011.

-2-

TSB-A-10(7)I
Income Tax
September 7, 2010

taxable income, gross income includes only gross income which is effectively connected with the conduct
of a trade or business within the United States.
In the present case, for taxable year 2011, Petitioner will file as a nonresident alien for Federal tax
purposes and will receive taxable income effectively connected with his conduct of a trade or business
within the United States. Accordingly, Petitioner will be required to file a 2011 Form 1040NR.
Furthermore, for taxable year 2011, Petitioner is a New York State and New York City statutory resident
and will be required to file a 2011 New York personal income tax return Form IT-201 as a New York City
statutory resident. Accordingly, Petitioner’s 2011 New York adjusted gross income as a resident individual
will be his 2011 Federal adjusted gross income from his 2011 Federal Form 1040NR, with any
modifications under Article 22 of the Tax Law that may apply.

DATED: September 7, 2010

NOTE:

/S/
DANIEL SMIRLOCK
Deputy Commissioner and Counsel

An Advisory Opinion is issued at the request of a person or entity. It is limited to the facts set
forth therein and is binding on the Department only with respect to the person or entity to whom it
is issued and only if the person or entity fully and accurately describes all relevant facts. An
Advisory Opinion is based on the law, regulations, and Department policies in effect as of the
date the Opinion is issued or for the specific time period at issue in the Opinion.