1. New York State Department of Taxation and Finance International Students and Scholars Spring 2009 Workshop

2. Please Note: The PowerPoint presentation, handout and a webcast of this presentation are available at www.buffalo.edu/intlservices/ tax2.html

3. Toll Free Tax Information 1-800-225-5829 (foreign language assistance is available) VISIT OUR WEB SITE www.nystax.gov

4. New York State (NYS) Income Taxes If you did not have income and only need to send Form 8843 to the IRS, then …… you do not need to file a New York State personal income tax return.

5. NYS Conforms with Internal Revenue Service  New York State (NYS) complies with ALL tax treaties that the Internal Revenue Service (IRS) uses.  Your Federal (IRS) Adjusted Gross Income (Form 1040NR- EZ, line 10 or Form 1040NR, line 35) is the starting point in computing your NYS income tax.  NYS Source Income for nonresidents is the Federal Income you received in New York State.  NYS Income for residents is the TOTAL Federal Income you reported to the IRS. Note: If you earned income in another state in the U.S., please consult that state for income tax filing requirements.

6. Changes in 2008  PLEASE NOTE: The NYS regulations have changed regarding rules which determine whether you are a resident or nonresident for New York State Income Tax Purposes.  If you filed a New York State income tax return for tax year 2007, you may be required to complete a different New York State income tax form for tax year 2008.  The form you may be required to file may be different for you than for your friend and may differ from year to year depending on your living arrangements and the amount of time you were present in New York State.

7. New York State Income Tax for Nonresident Alien Students & Scholars  If your domicile (a place you intend to return to as your permanent home) is outside New York State, you maintained a permanent place of abode (residence) in New York State, and you had New York Income, you may be required to file a New York State resident income tax return.  You can only have ONE domicile (for most of you that would be the home you intend to return to after you finish school).

8. New York State Income Tax for Nonresident Alien Students & Scholars  A "permanent place of abode" is a dwelling place permanently maintained by the taxpayer, whether or not it is owned by the taxpayer.  Any construction (place where you reside) which does not contain facilities ordinarily found in a dwelling, such as facilities for cooking, bathing, etc., will generally not be deemed a permanent place of abode.  Therefore, dormitory rooms (residence halls) that are NOT apartment style, are not considered a permanent place of abode under the meaning of the tax law.

9. Changes in 2008  The NYS Tax Department recently amended regulations concerning the definition of “permanent place of abode”, which is a factor in determining whether or not you may be required to file a resident return or nonresident return.  The regulations have changed beginning in tax year 2008. You are no longer considered a nonresident if you were in NYS “temporarily (temporary stay) for the accomplishment of a particular purpose”.

10. Resident or Nonresident ?  If your domicile is NOT New York State, but you maintained a permanent place of abode (Ex. apartment) for more than 11 months during 2008) AND spent more than 183 days in New York, THEN you may be required to file a NYS resident income tax return short form (Form IT-150). Note: If you have taxable scholarship, then you will need to file a NYS resident income tax return long form (Form IT- 201) to report the taxable scholarship. Note: It does not matter if your stay was temporary.

11. Resident or Nonresident?  If your domicile is NOT New York State and you did NOT maintain a permanent place of abode for more than 11 months during 2008, THEN then you may be required to file a NYS nonresident income tax return (Form IT-203)

12. YesNo Did you live in apartment housing on campus, an apartment or a house off campus ? If yes, did you maintain it (rent) for more than 11 months in the calendar year 2008? Did you spend more than 183 days in New York State during the calendar year 2008? If you answered YES to ALL of the above, you are considered a resident for NYS income tax purposes.

13. Who Must File a NYS Income Tax Return? Note: Filing requirements differ for NYS residents and NYS nonresidents

14. If I am a nonresident, do I need to file a NYS income tax return? Yes, if you meet any of the following conditions: :  You had New York-source income and your New York adjusted gross income (Federal amount column) is more than: $7,500 for single individuals $3,000 if single & can be claimed on another taxpayer’s IRS tax return $7,500 if married & filing separate tax returns  You want to claim a refund.

15. If I am a resident, do I need to file a NYS income tax return? Yes, if you meet any of the following conditions: :  You are required to file a federal return.  If your federal income is more than: $4,000 for single and married $3,000 if single & can be claimed on another taxpayer’s IRS tax return  You want to claim a refund or credit

16. Income Tax Filing Status: Guidelines for International Students/Scholars  If you checked “single” on your 1040NR-EZ or 1040-NR and you are required to file a NYS income tax return, you MUST check “single” as your filing status on your NYS income tax return.  If you checked “married” on your 1040NR-EZ or 1040NR, you must check “married filing separate” as your filing status on your NYS income tax return. (“Married filing joint” is not allowed on the Federal Income Tax return and therefore, not allowed on the NYS income tax return)

17. General Guidelines  Unlike the IRS tax return, NO PERSONAL EXEMPTION is allowed for you or your spouse on the NYS personal income tax return.  You are allowed the SAME amount of DEPENDENT EXEMPTIONS as claimed on your IRS tax return.  Unlike the IRS tax return, you may ALL claim a STANDARD DEDUCTION.

18. The NYS Standard Deduction Amount  2008 NYS standard deduction amount: $7,500 for single individuals $3,000 if single & can be claimed on another taxpayer’s federal (IRS) return $7,500 if married & filing separate tax returns

19. General Guidelines  DO NOT attach ANY of the federal (IRS) forms or schedules unless you carried on a trade or business in New York State for which special rules may apply.  DO NOT Send any Federal income tax returns to New York State.  Do NOT send any copies of W-2’s or 1042-S’s to New York State.  DO NOT send any other federal forms to New York State.

20. General Guidelines  If any part or your scholarship or fellowship was included as INCOME (for room and board) on your IRS tax return, then enter it on the line for OTHER INCOME on your NYS tax return. Remember: If you are filing as a resident, you should file Form IT-201.  If you included your 2007 State Income tax refund as income on your IRS tax return, you can subtract it on your NYS tax return.  Only enter the income reported on your IRS tax return onto the NYS tax return.

21. Who is entitled to a NYS household credit? Individuals who:  Cannot be claimed on another person’s federal tax return AND  Whose tax filing status and income on the NYS income tax return are: Single and federal adjusted gross income is $28,000 or less (Form IT-150, line 11 OR Form IT-201, line 18 OR Form IT-203, federal amount column, line 18) Married and federal adjusted gross income is $32,000 or less (Form IT-150, line 11 OR Form IT-201, line 18 OR Form IT-203, federal amount column, line 18)  The household credit is NOT refundable and will only reduce your NYS tax.  See Instructions booklet for household credit chart. Page 39 in IT-203 instruction booklet Page 22 in IT-150/IT-201 instruction booklet

22. New York State and Local Sales and Use Tax You owe a sales and use tax if: You purchase property or a service delivered to YOU in New York State without payment of sales and use tax (Ex. Internet, catalog purchases). Most tangible personal property is subject to New York and Local Sales tax. Examples: clothing, jewelry, electronic equipment, furniture, prewritten software, books (excluding textbooks), compact disks, videos, etc. For More information see Publication 774 – “Purchasers Obligations to pay Sales and Use Tax Directly to the Tax Department, Questions and Answers”.

23. Which NYS tax form do I need to file?  If you are a nonresident for NYS income tax purposes and are required to file an income tax return, you will need to file: Form IT-203, “Nonresident and Part-year Resident Income Tax Return” Form IT-203-B to report where you live when you maintained a permanent place of abode Form IT-2 for wages (if W-2 received)  If you are a resident for NYS income tax purposes and are required to file an income tax return, you will need to file: Form IT-150 “Resident Income Tax Return (short form)” or IT-201 (for taxable scholarship) Form IT-2 for wages (if W-2 received)

24. W-2 from the State of New York 2008

25. W-2 from the State of California 2008 96-0000001

26. What do I do with the state copy of the W-2?  If you are filing a NYS income tax return and have (a) W- 2(s), transfer your W-2 information onto NYS Form IT-2.  DO NOT attach a W-2 to your NYS income tax return (either the IT-203 or IT-150 or IT-201). Keep the state copy for your records.  DO NOT forget to complete the NYS withholding information on the IT-2  Attach the IT-2 to your NYS income tax return (either the IT-203 or IT-150 or IT-201). Note: Obtain Form IT-2 from www.nystax.gov

27. Transfer ALL W-2 Information to Form IT-2 {

28. IT-2

29. You must complete IRS Form 1040NR-EZ or 1040NR before filling out your NYS Income Tax Return

30. Whether you are completing a NYS nonresident or resident income tax return, you will transfer the income amounts from the 1040-NR-EZ or 1040-NR. Do not transfer any amounts exempt by tax treaty. Line 6 includes Scholarship and Wages reported on Form 1042-S and is NOT transferred to the NYS form. This amount is exempt by tax treaty. This column, lines 3- 10, is income subject to federal tax. It is transferred to NYS income tax return.

31. How do I Prepare a NYS Nonresident Income Tax Return? We will use the example from the IRS Income Tax Workshop.

32.  First, you must compute a base tax on ALL your taxable income from the IRS tax return that was transferred to the NYS federal amount column.  Once you compute the tax, then you must determine how much of your “computed tax” comes from NYS sources.  To determine this, divide your NYS income by your federal income. Then take that quotient (answer) and multiply it by the tax you computed. This is your NYS income tax. How are NYS Nonresidents Taxed?

33. Completing IT-203

34. Complete Lines 1 through 18. Transfer the amounts from Form 1040NR-EZ or 1040NR to the Federal Amount column. Put income you earned in New York State in the NYS amount column.

35. Use your Federal Adjusted gross income. Then determine your NYS adjusted gross income. If you included your state refund for tax year 2007 as income on your 1040NR-EZ or 1040NR, subtract it on line 24 to arrive at NYS taxable income. __________________________________________________________________________

36. Line 38 NYS taxes – see next slide for Tax Chart

37. If you have a dollar amount on line 37 (NYS taxable income), find your income tax in the tables beginning on page 65 of the IT-203 Instructions.

38. Household credit - see next slide for amount – page 39

39. NYS household credit chart for a single person who CANNOT be claimed on another taxpayer’s federal return

40. Computing NYS tax – line 44 multiplied by line 45

41. Line 56 (IT-203) is used to report the amount of sales tax you owe. If you do not owe sales tax, enter “0” on line 56. On page 42 of the IT-203 Instructions booklet, there are instructions for computing the amount of use tax due if you owe. If you DO NOT owe Sales and Use tax, enter a ZERO on line 56. DO NOT leave line 56 Blank.

42. page 4 of IT-203 – line 62 is from IT-2

43. Sign and Date NYS Income Tax Return JOY KIM Student 2/19/08 Joy Kim Student 2/26/09

44. If you maintain living quarters (permanent place of abode) in NYS and are required to complete Form IT-203, complete section B on form IT-203-B.

45. How Do I Prepare a NYS Resident Income Tax Return?

46. NYS Income Tax Forms for Residents  If you considered a resident and are required to complete an income tax return, you should complete : Form IT-150 - Resident Income Tax Return (short form) for Full-Year State Residents Form IT-201 - If you are reporting a taxable scholarship, then you must complete Form IT-201 Resident Income Tax Return (long form) for Full- Year State Residents

47. Jon Chan was an undergraduate who rented an apartment during all of 2008. Jon cannot be claimed on anyone else’s federal income tax return and did not receive any scholarship to pay his undergraduate tuition. 2008 16-1111111 000-11-0011 6

48. Jon completes Form IT-150 & IT-2. Because Jon is a full-year NYS resident and cannot be claimed on anyone else’s federal income tax return, he can claim a college tuition credit on Form IT-372 for his undergraduate tuition.

49. Transfer ALL income from your federal income tax return to your NYS income tax return.

50. Transfer W-2 information to Form IT-2. Complete IT-272 ONLY if you are a full- year NYS resident, cannot be claimed on anyone’s federal income tax return and are paying for your undergraduate tuition.

51. College Tuition Credit – Form IT-272  The college tuition credit is a tax credit allowed for qualified college tuition expenses paid by an eligible student.  The credit is available to full-year NYS residents only.  If the credit exceeds your tax for the tax year, the excess credit will be refunded. For tax year 2008, the credit is limited to $400 per eligible student.  Qualified college tuition expenses include ONLY the tuition required for enrollment or attendance at an institution of higher education. The expenses may be paid by cash, check, credit card or with borrowed funds  Only expenses for undergraduate enrollment or attendance qualify.  For more information, see Publication 10-W FAQs: New York State College Tuition Credit and Itemized Deduction - For tax year 2008

52. Form IT-272 College Tuition Credit

54. Mail your New York State income tax return by April 15, 2009 Mail to: State Processing Center PO BOX 61000 Albany, New York 12261-0001

55. Additional information for discussion Reporting Sales Tax ONLY  If you are not required to file a New York State personal income tax return (IT-203), you may report the amount of sales and use tax on form ST-140.  This form is due April 15, 2009.

56. Income Tax Filing TIPS  Remember to: Sign your NYS income tax return. Enter your Social Security Number on your income tax return. Complete Form IT-2 from your W-2 information and attach the IT-2.

57. Thank you for coming! The material included in this presentation is intended for international students and scholars in New York State who are in the U.S. on F-1 or J-1 visas. For more information, please refer to NYS Division of Taxation and Finance forms, instructions and publications.