New York Advisory Opinion TSB-A-90 (3)I: Rosenblatt, is whether as a nonresident working in New York he is entitled to deduct all or a portion of alimony payments paid to his spouse from whom he is legally separated.

Plain-English summary

Ronald S. Rosenblatt lived in Riverside, Connecticut, and worked in New York State, making him a New York nonresident for tax purposes. He was legally separated from his spouse, who remained a New York resident, and he paid her alimony - $9,000 in 1988, and an anticipated $11,000 in 1989. She reported and paid New York income tax on the alimony she received. Rosenblatt asked whether he, as a nonresident, could deduct all or part of those alimony payments in computing his own New York tax.

The Department said no - or more precisely, that he gets no proportional benefit from the payments at all. Under Tax Law § 601(e) (added in 1987), a nonresident's New York tax is computed in two steps: first, figure out what the tax would be if the nonresident were a full resident; then multiply that hypothetical tax by a fraction - New York-source income divided by federal adjusted gross income. Because federal adjusted gross income already reflects the IRC § 215 federal alimony deduction, that deduction quietly shrinks the fraction's denominator.

But Tax Law § 631(b)(6), also added in 1987, specifically provides that the IRC § 215 alimony deduction "shall not constitute a deduction derived from New York sources." That means the alimony payments cannot also reduce the fraction's numerator (New York-source income). The result: the deduction lowers the denominator but not the numerator, which mathematically works against the nonresident rather than for him - so Rosenblatt could not get the benefit of a proportional deduction for either year's alimony payments.

The Department noted that § 631(b)(6) specifically reversed Friedson v. State Tax Commission, 64 NY2d 76 (1984), a New York Court of Appeals decision that had allowed a nonresident to deduct alimony payments under the general formula for allocating itemized deductions. The 1987 legislature carved alimony out of that formula entirely, closing off the benefit Friedson had recognized.

What this means for you

Nonresidents working in New York who pay alimony

If you work in New York but live elsewhere, and you pay alimony to a New York resident (or anyone else), don't assume that deduction will reduce your New York tax the way other itemized deductions might. Since 1987, Tax Law § 631(b)(6) specifically excludes the alimony deduction from the New York-source numerator used in the nonresident allocation formula, so as a practical matter it provides no proportional New York tax benefit even though it still reduces your federal adjusted gross income.

Divorce attorneys and accountants advising multi-state couples

When structuring a separation or divorce involving a New York-nonresident payor and a New York-resident payee, be aware of the asymmetry: the recipient spouse pays New York tax on the alimony received (since it's income to a New York resident), while the paying nonresident spouse gets no offsetting New York deduction benefit. This mismatch has been the law since the 1987 amendments and should factor into settlement negotiations and tax planning for either party.

Common questions

Q: I can deduct alimony on my federal return - why doesn't that reduce my New York tax?
A: It does reduce one part of the calculation but not the part that matters for a nonresident. Your federal alimony deduction lowers your federal adjusted gross income, which is the denominator of the nonresident allocation fraction under Tax Law § 601(e). But Tax Law § 631(b)(6) says the alimony deduction is not "derived from New York sources," so it cannot also reduce the numerator (your New York-source income). Because the denominator shrinks but the numerator doesn't, you don't get a proportional New York tax benefit from the payments.

Q: Didn't a court once allow nonresidents to deduct alimony this way?
A: Yes - Friedson v. State Tax Commission, 64 NY2d 76 (1984), allowed a nonresident to deduct alimony under the general itemized-deduction allocation formula that then applied. The New York Legislature responded in 1987 by enacting Tax Law § 631(b)(6), which specifically overrides Friedson and excludes the alimony deduction from that formula going forward.

Q: Does this mean I'm taxed twice on the same alimony - once by me and once by my ex-spouse?
A: Not exactly double taxation on the identical dollars, but there is an asymmetry: the New York-resident spouse who receives the alimony reports and pays New York tax on it as income, while the nonresident spouse who pays it gets no proportional New York deduction. The alimony deduction still lowers the payor's federal adjusted gross income; it just doesn't flow through to reduce his New York-source income fraction.

Q: Would the result be different if both spouses were New York residents, or if the paying spouse were also a resident?
A: This opinion addresses only a nonresident payor computing tax under the § 601(e) nonresident allocation formula. That formula, and the § 631(b)(6) carve-out, are specific to how nonresidents allocate income and deductions between New York and other jurisdictions; they don't describe how a resident-to-resident alimony arrangement would be taxed.

Q: Does this rule apply to alimony paid in any tax year, or only 1988 and 1989?
A: The statutes at issue - Tax Law §§ 601(e) and 631(b)(6) - were added by 1987 NY Laws, Chapter 28, and made applicable to taxable years after 1987. The opinion addressed Rosenblatt's 1988 and 1989 payments specifically, but the underlying rule continues to apply to later years unless the statute has since been amended.

Citations and references

• Tax Law § 601(e) (as added by 1987 NY Laws, ch. 28, § 3) - computes a nonresident's tax as if a resident, multiplied by a fraction of New York-source income over federal adjusted gross income
• Tax Law § 631(b)(6) (as added by 1987 NY Laws, ch. 28, § 78) - provides that the IRC § 215 alimony deduction is not a deduction derived from New York sources
• IRC § 215 - the federal deduction for alimony payments, which flows into federal adjusted gross income
• Friedson v. State Tax Commission, 64 NY2d 76 (1984) - previously allowed a nonresident's alimony deduction under the general itemized-deduction allocation formula; legislatively reversed by Tax Law § 631(b)(6)

Source

• Landing page: https://www.tax.ny.gov/pubs_and_bulls/advisory_opinions/income_ao_1990.htm
• Opinion: https://www.tax.ny.gov/pdf/advisory_opinions/income/a90_3i.pdf

Original ruling text

New York State Department of Taxation and Finance

Taxpayer Services Division
Technical Services Bureau

TSB-A-90 (3) I
Income Tax
January 18, 1990

STATE OF NEW YORK
COMMISSIONER OF TAXATION AND FINANCE
ADVISORY OPINION

PETITION NO. I891121A

On November 21, 1989 a Petition for Advisory Opinion was received from Ronald S.
Rosenblatt, 50 Crawford Terrace, Riverside, Connecticut 06878.
The issue raised by Petitioner, Ronald S. Rosenblatt, is whether as a nonresident working in
New York he is entitled to deduct all or a portion of alimony payments paid to his spouse from
whom he is legally separated.
Petitioner is a nonresident of the State of New York. He is employed in New York State. In
1988 he paid $9,000.00 in alimony to his resident spouse from whom he is legally separated. In
1989 he will pay her $11,000.00 in alimony. She is paying New York State income tax on the
alimony payments she receives.
Section 601(e) of the Tax Law, as added by 1987 NY Laws, Chapter 28 Section 3 (as
subsequently amended) and applicable to taxable years after 1987 provides in part:
"Nonresidents...(1) There is hereby imposed for each taxable year on
the taxable income which is derived from sources in this state of
every nonresident...individual...a tax which shall be equal to the tax
computed under subsections (a) through (d) of this section, as the case
may be, reduced by the credits permitted under subsections (b) and (c)
of section six hundred six, as if such nonresident... individual .... were
a resident, multiplied by a fraction, the numerator of which is such
individual's .... New York source income determined in accordance
with Part III of this article and the denominator of which is such
individual's federal adjusted gross income for the taxable year.
Section 631(b)(6) of the Tax Law, as added by 1987 NY Laws, Chapter 28, Section 78 and
applicable to taxable years after 1987 provides:
"The deduction allowed by section two hundred
fifteen of the internal revenue code, relating to
alimony, shall not constitute a deduction derived from
New York sources."
Therefore, a nonresident individual computes his New York taxable income by first
determining what the tax due would be if he were a resident individual and then by multiplying the
tax shown as due by a fraction whose numerator is his New York source income and whose
denominator is his Federal adjusted gross income in accordance with Section 601(e) of the Tax Law.
In computing the tax as if a resident and in computing his Federal adjusted gross income the
individual has deducted alimony payments made to his spouse. However he cannot deduct such
payments in computing his New York source income numerator since under Section 631(b)(6)
alimony paid by a nonresident to a resident is not considered a deduction derived from New York

-2­
TSB-A-90 (3) I
Income Tax
January 18, 1990
sources. This section specifically reversed Friedson v State Tax Commission, 64 NY2d 76 (1984),
which had allowed an alimony deduction to a nonresident according to the formula for allocation of
itemized deductions by the nonresident. The effect of the allowance of the deduction in the base and
the denominator and disallowance in the numerator is that Petitioner cannot get the benefit of a
proportional deduction of the alimony payments made to his spouse in 1988 or 1989.

DATED: January 18, 1990

s/PAUL B. C0BURN
Deputy Director
Taxpayer Services Division

NOTE: The opinions expressed in Advisory Opinions
are limited to the facts set forth therein.