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Instructions For Form Tsb-M-10(1)i - Income Tax - Office Of Tax Policy Analysis Taxpayer Guidance Division Page 4

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TSB-M-10(1)I

Income Tax

TSB-M-10(1)MCMT

MCTMT

January 11, 2010

Note: The military spouse’s exempt income should not be included in the amount of the

subtraction for a servicemember’s military income that is made in the Federal amount column of

the Form IT-203.

In addition, a military spouse who is completing Form IT-203 and has income which is

exempt under the Act is required to enter the special condition code “M2” in the box at item F on

the front of Form IT-203. This will allow the Tax Department to properly process the return.

Failure to enter the special condition code on the return could result in unnecessary delays in

processing the return and issuing a refund.

If the servicemember and his or her spouse are filing a joint Form IT-203,

Form IT-203-C, Nonresident or Part-Year Resident Spouse’s Certification, should not be

completed or attached to Form IT-203 if, as a result of the Act and the SCRA, neither spouse

has any New York source income.

New York City and Yonkers income taxes

The rules relating to domicile or residence of a military spouse also apply in determining

whether or not a military spouse is a resident of New York City for purposes of the

New York City resident income tax or a resident of Yonkers for purposes of the Yonkers resident

income tax surcharge. In addition, if the income of a military spouse is exempt from New York

State personal income tax, it is also exempt from the Yonkers nonresident earnings tax.

Special rules for employers in 2010

Because of the timing of the federal law, it is possible that employers will withhold some

New York State, New York City, or Yonkers taxes from a military spouse in 2010 before the

spouse can submit Form IT-2104-E to the employer. In this situation, once the employer receives

Form IT-2104-E from the military spouse, the employer may refund to the military spouse any

New York tax withheld in 2010. For this rule to apply, the tax withheld must be refunded on or

before March 31, 2010.

New York State resident military spouses who are subject to New York income tax

A military spouse who is a domiciliary or resident of New York State should be aware

that the new federal law could affect the amount of New York tax he or she has to pay if he or

she:

• is required to file a New York State resident personal income tax return;

• is in another state solely to be with the servicemember when the servicemember is in

that state in compliance with his or her military orders; and

• is employed or operates a business in that state.

Instructions For Form Tsb-M-10(1)i - Income Tax - Office Of Tax Policy Analysis Taxpayer Guidance Division Page 4