Navigating Tax Complexities: Addressing Residency Confusion and Possible Amendments
As a New York resident owning a home improvement business in Connecticut, understanding the tax implications of different state requirements can be quite challenging. I ventured into this new chapter in January 2024 with great enthusiasm, operating a sole-owner LLC in Connecticut, where all my business transactions take place. In addition to this entrepreneurial endeavor, I juggle a part-time W-2 job in the same state.
For the first time, I sought the expertise of a new accountant to file my taxes, particularly focusing on my startup business. However, I was puzzled to find out that she submitted a New York non-resident, part-time resident tax return on my behalf. This seemed counterintuitive given that all my personal affiliations—such as my mailing address and driver’s license—are rooted in New York.
Moreover, while my business is registered at a Connecticut address (a family member’s condo), I do not personally reside in Connecticut. Yet, my accountant filed a Connecticut resident tax return for me, leading to concerns about potential double taxation and the absence of a tax credit.
Reflecting on my previous tax filing for 2023, I held a W-2 position in Connecticut at that time as well, but my prior accountant classified me as a New York resident—this was before my business came into existence.
I am now seeking clarification and advice on this complex situation. If you have insights into the nuances of New York and Connecticut tax laws, particularly regarding residency criteria, your guidance would be invaluable. I’m determined to rectify any possible errors to avoid unnecessary burdens and ensure compliance across both states.
