FINALLY!

  

The 2021 New York State income tax returns, forms, schedules, and instructions are finally available to download online on the website of the New York Department of Taxation and Finance.  Click here.

A brief review of the 2021 IT-201(resident) and IT-203 (non-resident and part-year resident) returns indicates they are exactly the same as the 2020 forms – no changes to the descriptions and line numbers on either form.

The instruction booklet for both forms do not have a page to identify “What’s New” for 2021 returns as they usually did in the past – but a NY state tax update I “attended” in January (part of an online webinar) discussed the following changes of note –

* New York now has a PTET (Pass Through Entity Tax), which is the Empire State’s version of NJ’s BAIT tax scam, to assist NY taxpayers in evading federal income tax.

* New York continues to decouple from federal tax law changes.  It currently does not follow the temporary or permanent federal changes to the Earned Income Tax Credit (EITC).

* There is a new NY Real Property Relief Credit of between $250 and $350 that is calculated on NY Form IT-229.  The NY itemized deduction for property tax paid that is claimed on IT-196 is reduced by the amount of the credit claimed on IT-229.

And while we are on the subject of state taxes, the Pennsylvania 2021 state income tax returns, forms, schedules, and instructions are also now available online.  Nothing of any consequence new for PA state returns either.  Click here.

TTFN

THIS JUST IN - IT'S BACK!

Oi vey!  It now appears that the reciprocal agreement between New Jersey and Pennsylvania will remain in place.  New Jersey and Pennsylvania residents working in the opposite state will continue to pay state income taxes only in the state where they live.

 

According to the Governor’s website -

 

“Governor Chris Christie announced today he is now able to save the income tax reciprocity agreement with Pennsylvania, thanks to health benefit reforms enacted since the FY17 budget passed.”

 

I wonder how many employers had already wasted money to change their software or internal payroll procedures.

 

I trust that this “saving” of the reciprocal agreement by CC will not be reversed again – although I did not oppose, and actually supported, the end of the agreement.

 

 

 

 

 

 

ONE MORE TIMELY PIECE OF BUZZ

A timely piece of BUZZ that can’t wait until next Monday.

Kelly Phillips Erb tells us “NJ Governor Christie Ends Decades Old Tax Agreement With Pennsylvania”.

 

Kay Bell also covers this announcement in "Christie plans to end New Jersey-Pennsylvania tax pact".

This action by CC will end the reciprocity beginning with tax year 2017.  So it will not affect 2016 returns.

I never had any issue with the reciprocity agreement – except with employers who did not withhold properly.  But I do not object to this action.  As a fellow NJ-NATP member pointed out in a comment at the chapter’s Facebook Group (highlight is mine) –

“Now NJ subsidizes higher-income PA residents working in NJ.  Admittedly, lower-income NJ residents working in PA outside Philly will be adversely affected, but we have no such protections for NJ folks working in NY.  Tax policy should strive for simplicity and attempt not to discriminate in favor of or against folks based on where they live and work.”

I think the end of the reciprocity will make things easier for the one client I have left who it will affect – mostly because this NJ resident’s PA employer did not properly withheld NJ state tax in the past so I had to file a “0” PA return to get a full refund of the state tax withheld so he could pay it to NJ.

 

Hopefully employers will property withhold state taxes for 2017 - they certainly have enough time to change their systems.

FYI - I once was a supporter of Christie, but lost all respect for him when he kissed dangerous narcissist Trump’s ring.