Does getting a 1099 from another state count as working in another state if I was physically in my home state?

Question

I live in California and worked on a freelance software programming gig for a company in New York.

I'm filing my tax returns. I got a 1099 from the New York client. I was physically in California when I did all of my programming. Do I need to file a New York State tax return?

I'm actually using Turbo Tax and it asked me whether I made money in another state.

The wording is: "Did you make money in any other states?"

"Select YES if you made income from any of the below: Living in one state and working in another..."

I was not physically in the other state.

Answer 1

This depends on the state law. In case of the State of New York - these are the criteria for sourcing the NY income:

As a sole proprietor or partnership, your New York source income includes:

• income attributable to a business, trade, profession, or occupation carried on in New York State;
• income attributable to the ownership of any interest in real property (including all or a portion of the gain or loss from the sale or exchange of an interest in certain entities that own real property in New York State, see TSB-M-09(5)I), Amendment to the Definition of New York Source Income of a Nonresident Individual;
• income attributable to tangible personal property located in New York State, and intangible personal property to the extent that it is used in a business, trade, profession, or occupation carried on in New York State; and
• any gain from the sale, transfer, or other disposition of shares of stock in a cooperative housing corporation when the real property comprising the units of the cooperative housing corporation is located in New York State, whether or not connected with a business.

Business activities

As a nonresident sole proprietor or partnership, you carry on a business, trade, profession, or occupation within New York State if you (or your business):

• occupy, have, maintain, or operate an office, shop, store, warehouse, factory, agency, or other place in New York State where the affairs of the business are systematically and regularly carried on; or
• perform a series of acts or transactions in New York State with regularity and continuity for livelihood or profit, as distinguished from isolated or incidental transactions.

As you can see, the qualification depends on the way you do business, and the amount of business transactions you have in New York. If it is not clear to you - talk to a CPA/EA licensed to practice in the State of New York to give you an advice.

Answer 2

You might need to check yes... but I would check out New York's nonresident income tax requirements...

My guess is yes if you meet the requirements, but I am not an expert nor do I work in the accounting or legal field.

Check out New York's nonresident tax page explaination