I reside and pay taxes in Illinois. I have a client that is based in NY. I do work for this client in Chicago, where I live. Employer deducts NY State Income tax. (I am a freelance actor, but this particular employer is not 1099 income but regular W2 income.) Last year, I owed additional state taxes to NY. I would understand if the taxes I pay in NY essentially cancel out what I might owe for that income on my Illinois return, but why would I owe taxes on that income if taxes are deducted from every check? All the work is performed in Chicago, where I live. I am not working remotely. The company is based in NYC. Why would I owe additional NY taxes? Are they basing it on my total Illinois income, including my wife's?

  • Did you file tax forms with both states? Did you have other clients? – mhoran_psprep Dec 6 '14 at 22:27
  • Yes, I file in both states. I have numerous clients, but the majority of the work is based in Illinois, ie, client is based here and work was performed here. I've filed out-of-state returns multiple times over the years, usually related to work that is performed entirely in that state. (Say three months at a theatre in Nebraska, 2 months in Iowa) But I've never owed additional taxes other than what's been withheld, and depending on the relationship with the other state (reciprocal agreements) it's usually pretty easy to file and often get those monies back. – Chicago Actor Dec 6 '14 at 22:41
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    Are you actually physically present in New York throughout the year? Do you own property in New York? Do you rent a place? Based on what are you filing New York tax returns and paying New York taxes? – littleadv Dec 6 '14 at 23:05
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    Tax withholding is not the same as tax due. If, as littleadv is suggesting, any income from a NY source is not NY income to you, then you should file a NY return to claim a refund of all taxes withheld since you don't owe NY any tax at all. – Dilip Sarwate Dec 6 '14 at 23:55
  • Though I may be in NY for work during the year it is not with this particular client. I neither own nor rent property in NY. I probably have my terms wrong, but the NY returns filed are only for the taxes owed/paid on this particular piece of work (which again, is solely performed in Chicago where I live full time). Thanks all, for your questions and advice.Last year, other than taxes withheld from my checks, I owed (and paid) an additional $200. I just wondered if they're considering my total tax liability (married, filing jointly) as opposed to the income received from NY client. – Chicago Actor Dec 7 '14 at 16:01

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