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Subject:  New York State Standard Deduction Date:  4/10/2010  12:54 AM
Author:  LukeB546 Number:  110046 of 127747

Is it really the case that the standard deduction for New York doesn't consider the different contributing sources to federal adjusted gross income, such as earned and unearned sources?

My federal adjusted gross income (~$13000 total) is comprised of ~$2000 of normal W-2 based earned income, and ~$11000 "unearned" income from a taxable grant that's reported on form 1099-G. I was surprised (and annoyed) to see that my the standard deduction for my federal return was only ~$2300 (made up of my ~$2000 earned income and then the extra $300 allowance), and I am now confused to see that NY is allowing a flat out $3000 standard deduction.

So, does NY really not care about the component income sources from the federal AGI when giving the standard deduction??

Also, just because the taxable grant is part of my federal AGI, does that really mean that NY "automatically" gets to tax it? I am a resident of NY, but the taxable grant is coming from the graduate school I started at in Massachusetts in Fall 2009 (where I am currently renting an apartment, but am a nonresident, at least as far as 2009 is concerned).

The school offers this suggestion in a tax brochure:
For most nonresident students,
their MA source income will be limited to compensation
from employment in MA. Interest or dividends
received from MA banks or corporations will
generally not be MA source income because such
items are not connected with a business activity of the
student. Scholarship or fellowship grants not requiring
the rendition of services should also not be deemed
MA source income as no trade or business is involved.

So, if MA can't tax the grant (I guess just because I'm a nonresident), does that mean NY gets to tax it all?

Any help would be greatly appreciated!
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