N.Y.
Tax Law Section 631
New York source income of a nonresident individual
(a)
General. The New York source income of a nonresident individual shall be the sum of the following:(1)
The net amount of items of income, gain, loss and deduction entering into his federal adjusted gross income, as defined in the laws of the United States for the taxable year, derived from or connected with New York sources, including: (A) his distributive share of partnership income, gain, loss and deduction, determined under section six hundred thirty-two, and (B) his pro rata share of New York S corporation income, loss and deduction, increased by reductions for taxes described in paragraphs two and three of subsection (f) of section thirteen hundred sixty-six of the internal revenue code, determined under section six hundred thirty-two, and (C) his share of estate or trust income, gain, loss and deduction, determined under section six hundred thirty-four and (2) The portion of the modifications described in subsections (b) and (c) of section six hundred twelve which relate to income derived from New York sources (including any modifications attributable to him as a partner or shareholder of a New York S corporation).(b)
Income and deductions from New York sources.(1)
Items of income, gain, loss and deduction derived from or connected with New York sources shall be those items attributable to: (A) the ownership of any interest in real or tangible personal property in this state; or(1)
For purposes of this subparagraph, the term “real property located in this state” includes an interest in a partnership, limited liability corporation, S corporation, or non-publicly traded C corporation with one hundred or fewer shareholders (hereinafter the “entity”) that owns real property that is located in New York or owns shares of stock in a cooperative housing corporation where the cooperative units relating to the shares are located in New York; provided, that the sum of the fair market values of such real property, cooperative shares, and related cooperative units equals or exceeds fifty percent of all the assets of the entity on the date of sale or exchange of the taxpayer’s interest in the entity. Only those assets that the entity owned for at least two years before the date of the sale or exchange of the taxpayer’s interest in the entity are to be used in determining the fair market value of all the assets of the entity on the date of sale or exchange. The gain or loss derived from New York sources from the taxpayer’s sale or exchange of an interest in an entity that is subject to the provisions of this subparagraph is the total gain or loss for federal income tax purposes from that sale or exchange multiplied by a fraction, the numerator of which is the fair market value of the real property, and the cooperative housing corporation stock and related cooperative units located in New York on the date of sale or exchange and the denominator of which is the fair market value of all the assets of the entity on the date of sale or exchange. (B) a business, trade, profession or occupation carried on in this state; or (C) in the case of a shareholder of an S corporation where the election provided for in subsection (a) of § 660 (Election by shareholders of S corporations)section six hundred sixty of this article is in effect, the ownership of shares issued by such corporation, to the extent determined under § 632 (Nonresident partners and electing shareholders of S corporations)section six hundred thirty-two of this article; or (D) winnings from a wager placed in a lottery conducted by the division of the lottery, if the proceeds from such wager exceed five thousand dollars; or (D-1) gambling winnings in excess of five thousand dollars from wagering transactions within the state; or (E) gains from the sale, conveyance or other disposition of shares of stock in a cooperative housing corporation in connection with the grant or transfer of a proprietary leasehold by the owner thereof and subject to the provisions of article 31 (Real Estate Transfer Tax)article thirty-one of this chapter, whether such shares are held by a partnership, trust or otherwise; or (E-1) in the case of an S corporation for which an election is in effect pursuant to subsection (a) of § 660 (Election by shareholders of S corporations)section six hundred sixty of this article that terminates its taxable status in New York, any income or gain recognized on the receipt of payments from an installment sale contract entered into when the S corporation was subject to tax in New York, allocated in a manner consistent with the applicable methods and rules for allocation under article nine-A or thirty-two of this chapter, in the year that the S corporation sold its assets. (F) income received by nonresidents related to a business, trade, profession or occupation previously carried on in this state, whether or not as an employee, including but not limited to, covenants not to compete and termination agreements. Income received by nonresidents related to a business, trade, profession or occupation previously carried on partly within and partly without the state shall be allocated in accordance with the provisions of subsection (c) of this section.(2)
Income from intangible personal property, including annuities, dividends, interest, and gains from the disposition of intangible personal property, shall constitute income derived from New York sources only to the extent that such income is from property employed in a business, trade, profession, or occupation carried on in this state or from winnings from a wager placed in a lottery conducted by the division of the lottery, if the proceeds from such wager exceed five thousand dollars. Income from the disposition of intangible personal property shall also constitute income derived from New York sources to the extent such gains are from the sale, conveyance or other disposition of shares of stock in a cooperative housing corporation in connection with the grant or transfer of a proprietary leasehold by the owner thereof and subject to the provisions of article 31 (Real Estate Transfer Tax)article thirty-one of this chapter, whether such shares are held by a partnership, trust or otherwise.(3)
Income directly or indirectly derived by an athlete, entertainer, or performing artist from closed-circuit and cable television transmissions of an event (other than events occurring on a regularly scheduled basis) taking place within the state as a result of the rendition of services by such athlete, entertainer or performing artist shall constitute income derived from New York sources only to the extent that such transmissions were received or exhibited within the state.(4)
Deductions with respect to capital losses, passive activity losses and net operating losses shall be based solely on income, gain, loss and deduction derived from or connected with New York sources, under regulations of the commissioner of taxation and finance, but otherwise shall be determined in the same manner as the corresponding federal deductions.(5)
In the case of a nonresident individual or partner of a partnership doing an insurance business as a member of the New York insurance exchange described in Insurance Law § 6201 (New York insurance exchange)section six thousand two hundred one of the insurance law, any item of income, gain, loss or deduction of such business which is the individual’s distributive or pro rata share for federal income tax purposes or which the individual is required to take into account separately for federal income tax purposes, shall not constitute income, gain, loss or deduction derived from New York sources.(6)
The deduction allowed by section two hundred fifteen of the internal revenue code, relating to alimony, shall not constitute a deduction derived from New York sources.(c)
Income and deductions partly from New York sources. If a business, trade, profession or occupation is carried on partly within and partly without this state, as determined under regulations of the tax commission, the items of income, gain, loss and deduction derived from or connected with New York sources shall be determined by apportionment and allocation under such regulations.(d)
Purchase and sale for own account.-- A nonresident, other than a dealer holding property primarily for sale to customers in the ordinary course of his trade or business, shall not be deemed to carry on a business, trade, profession or occupation in this state solely by reason of the purchase and sale of property or the purchase, sale or writing of stock option contracts, or both, for his own account.(e)
Military pay. Compensation paid by the United States for active service in the armed forces of the United States, performed by an individual not domiciled in this state, shall not constitute income derived from New York sources.(f)
Husband and wife. If husband and wife determine their federal income tax on a joint return but are required to determine their New York income taxes separately, they shall determine their New York source incomes separately as if their federal adjusted gross incomes had been determined separately.(g)
Stock option grants, stock appreciation rights and restricted stock. A nonresident taxpayer who has been granted statutory stock options, restricted stock, nonstatutory stock options or stock appreciation rights and who, during such grant period, performs services within New York for, or is employed within New York by, the corporation granting such option, stock or right, shall compute his or her New York source income as determined under rules and regulations prescribed by the commissioner.
Source:
Section 631 — New York source income of a nonresident individual, https://www.nysenate.gov/legislation/laws/TAX/631 (updated Apr. 19, 2019; accessed Dec. 21, 2024).
