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You left New York with unvested stock. New York may still tax what vests, and the first question is whether you are inside the rule, then how much.
The fraction worked out properly, from grant date to vest date, counted in workdays
The allocation form filed, so the number on your nonresident return is supported
A move modeled first, where the vest has not happened yet and the timing is still yours to choose
New York taxes a share of the equity granted while you lived there, and the share depends on where you worked from grant to vest.
TSB-M-07(7)I is a technical memorandum from the New York State Department of Taxation and Finance. It sets the New York treatment of stock options, restricted stock and stock appreciation rights held by nonresidents and part year residents. Restricted stock units are not named in it. New York’s Division of Tax Appeals applied the restricted stock rule to RSUs in Matter of Adams (2024), so an RSU vest is allocated on the workday fraction as well.
It took effect for tax years beginning on or after January 1, 2006, and it supersedes TSB-M-95(3)I. A 2006 statute and the regulations adopted that December replaced the old method.
The old memo allocated from grant to exercise. The current rule allocates from grant to vest for options and rights.
For a nonresident, New York source income from these items is the compensation multiplied by the New York workday fraction for the allocation period. That is the entire rule; everything else is working out the two numbers in it.
The numerator is qualifying New York workdays in the allocation period. The denominator is qualifying workdays everywhere for the grantor over the same period.
New York taxes a fraction of the vest.
Allocation period, grant to vest.
Grant in January 2022, vest in January 2026, one year worked in New York and three years on employer required duties in Florida.
| Item | Figure |
|---|---|
| New York workdays | 240 |
| Workdays elsewhere | 720 |
| Total workdays | 960 |
| New York workday fraction | 25 percent |
| Income on vesting | 400,000 dollars |
| New York source income | 100,000 dollars |
Three details to get right:
Count workdays. Weekends, holidays and other days not worked come out of both sides of the fraction.
Days for that grantor, or a related corporation. Days for a related company count where the work was in consideration for the award; days for an unrelated employer do not.
Working from home counts as New York. Ordinary workdays at home are New York days unless your employer’s necessity requires you to be out of state.
A remote worker who left New York but still logs ordinary days at home for the same New York employer may not be moving the denominator.
Which days qualify is a convenience test question, and that is the numerator of this fraction.
The allocation period also differs by award type. Options and stock appreciation rights: grant to vest. Restricted stock: from the date the stock was received to the earliest of substantial vesting, termination, or sale.
A part year resident splits the year. Compensation recognized while resident is taxed in full, and compensation recognized in the nonresident period is allocated on the fraction.
Under the Schedule B table in the IT-203-F instructions, three situations are reported off Form IT-203-F entirely.
| Situation | Where it is reported | Watch for |
|---|---|---|
| Restricted stock, 83(b) election made | Form IT-203-B | Off IT-203-F entirely |
| Options with a value set at grant | Form IT-203-B | Off IT-203-F entirely |
| Option or right granted and vested the same day | Schedule B, line 19 | Uses the IT-203-B decimal |
Check the first row before building a workday schedule. An 83(b) election taken years earlier means the award is allocated on IT-203-B and is not on this form.
The form is only required where you worked both in and outside New York for the grantor during the period, and where the allocation period differs from your ordinary pay period.
Someone granted equity after leaving, who performs no services for that grantor that count as New York days during the period, is outside it.
Where the vest has not happened yet, this is a planning question. Each additional qualifying workday outside New York moves the denominator.
We can model the number before you sign a lease or accept a start date, alongside the federal projection.
Send the grant agreements and a rough workday history. We tell you what share New York can reach before you commit to anything.
Send grant agreements and vesting schedules for each tranche, since each has its own allocation period.
Send a workday record for the period, including days worked on trips back into New York.
We build the fraction for each tranche and apply the allocation period that fits that award type.
We prepare the nonresident return with the allocation form, and the resident state credit where one is available.
You keep the workday schedule, which is the first thing New York asks for on review.
We work with clients in all 50 states by video and phone. Workdays on trips back into New York are the ones clients underestimate, and they belong in the numerator.
Filing work is quoted with the nonresident return and its state allocation. A projection is quoted separately as specialist time. These are the factors, not a quote.
We work with clients all over the country as well as internationally... So don’t feel constrained and say, ’Hey, I need to find something I can drive to.’ Reach out and we’ll let you know.
Great experience with the Dimov CPA team. I had a fairly complicated situation with property sale and moving between states. The team was quick, answered all questions, was responsive, courteous and professional.
Our team includes CPAs and Enrolled Agents who work on individual returns, business taxes and tax planning. Tell us what you need help with when you get in touch.
You are probably here with a W-2 that still shows New York withholding, or a letter asking why your nonresident return reported less than New York expected.
Both are answered with a workday schedule and a calculation, and the time to do it is before the return is filed.
General rules only, not advice on your situation. The allocation turns on facts we have not seen, so speak to a CPA or an Enrolled Agent before filing.
