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My question: Is it correct that as long as my brother is receiving his NY pension that he has to complete the NY Non-Resident or Part-Year Resident Form (Form IT-203)?

No. The Feds had to crack down on states that were trying to do this several years ago. (NY and CA were two of the biggest offenders.)

Retirement income is taxable in the state of residence, not in the state where the retirement was earned.

I would amend any open years with NY and remove the pension as taxable to NY. This might also entail amending the VA returns if he claimed a credit for taxes paid to NY. NY tax rates are pretty high, so the refund from NY should be larger than the additional taxes to VA. But I wouldn't expect there to be a large difference.

And for 2006 and forward, no NY return should be needed unless he moves back to NY.

--Peter
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