How the State of New York Taxes Foreign Earned Income

Unfortunently no. However, as stated above, the State of NY does allow the Foreign Earned Income Exclusion. So, if you filed your Federal return using the Foreign Tax Credit, you should amend it using the Foreign Earned Income Exclusion.

As long as NY remains your domicile you will still need to file your NY state tax return every year, even if all your income is excluded using the foreign earned income exclusion.

Exception: If your domicile is New York but meets all three conditions in either Group A or Group B, you are not a New York State resident.

Group A

1. You did not maintain any permanent place of abode in New York State during the tax year, and

2. You maintained a permanent place of abode outside New York State during the entire tax year, and

3. You spent 30 days or less (a part of a day is a day for this purpose) in New York State during the tax year.

Group B

You were in a foreign country for at least 450 days during any period of 548 consecutive days, and

You, your spouse (unless legally separated), and minor children spent 90 days or less in New York State during these 548 days; and

During the nonresident portion of the tax year in which the 548-day period begins and during the nonresident portion of the tax year in which the 548-day period ends, you were present in New York State for no more than the number of days which bears the same ratio to 90 as the number of days in such portion of the tax year bears to 548. The following formula illustrates this condition:

Number of days in the nonresident portion x 90 = maximum number of days allowed in New York State

548

Nonresident

You are a New York State nonresident if you were not a resident of New York State for any part of the year.

Part-year resident

You are a New York State part-year resident if you meet the definition of resident or nonresident for only part of the year.

New York City and Yonkers

For the definition of a New York City or Yonkers resident, nonresident, and part-year resident, see the definitions of a New York State resident, nonresident, and part-year resident above and substitute New York City or Yonkers in place of New York State.