Question 1

If I live in Connecticut and work in New York, do I file in both states?

Accepted Answer

Often, yes. Connecticut generally taxes residents on all of their income, and New York generally taxes nonresidents on income from New York sources, which commonly includes wages for work performed in New York. That usually means a New York nonresident return and a Connecticut resident return. Your situation depends on where you actually perform your work and what other income you have, so it is worth confirming with a tax professional each year.

Question 2

How does the credit for taxes paid to another state work for a Connecticut resident?

Accepted Answer

Connecticut residents may be able to claim a credit on their Connecticut return for income tax paid to another qualifying state, such as New York, on the same income. The credit is generally limited to the Connecticut tax attributable to that income, so it may not offset every dollar paid to New York. The New York return is usually prepared first, and its figures feed the Connecticut credit calculation. Rules and forms change, so we confirm current instructions each filing season.

Question 3

Does working from home in Connecticut change what New York can tax?

Accepted Answer

It can. New York and Connecticut may not treat remote workdays the same way, and the answer can depend on the facts of your job, such as whether you work remotely by your employer's requirement or by your own choice. Keeping a record of where you work each day gives you and your tax preparer something concrete to rely on. This is an area where rules and agency guidance evolve, so we review it with you rather than assume a single answer.

Question 4

How are RSUs and ISOs taxed if I live in Connecticut and work for a New York company?

Accepted Answer

At the federal level, RSUs are generally taxed as ordinary income when they vest, and an ISO exercise may create an Alternative Minimum Tax item in the year of exercise even if you do not sell. At the state level, part of the income may be allocated between New York and Connecticut based on where you worked during the relevant period, and state treatment can differ from federal treatment. Because the outcome depends on your grant terms, work location, and income, we model it for your situation instead of relying on a rule of thumb.

Question 5

Does QSBS apply to my shares, and does my state matter?

Accepted Answer

It may. Section 1202 can allow eligible shareholders to exclude part of the gain on qualified small business stock from federal tax, but eligibility depends on when the shares were issued, the holding period, the company's size at issuance, and other conditions. The federal rules changed for stock issued after July 4, 2025, so the date of your grant or exercise is an important fact. States can treat the exclusion differently, so we confirm how each state you are connected to handles it before a sale. Results vary by individual circumstances.

Two-State Tax and Equity Compensation Planning, Coordinated by One Team

Two States Can Each Have a Claim on the Same Paycheck

You may file in two states every year

The credit for taxes paid to another state has rules and limits

Remote and hybrid workdays can change where income is sourced

Equity compensation adds timing questions on top of the filing questions

How Coordinated Planning Supports Two-State Households

Equity Compensation Planning

Tax Planning

Tax Preparation

Financial Planning

Planning Through Each Equity and Tax Moment

Each tax year: two returns, one picture

At RSU vesting

At ISO exercise

Before and after a sale of QSBS-eligible shares

A Few Documents Can Make the First Conversation More Productive

Explore the Questions Behind the Decisions

QSBS and Section 1202 planning

ISO and NSO tax considerations

Equity compensation planning for startup employees

Diversifying a concentrated stock position

What Changes When Everything Works Together

NY/CT Tax and Equity Compensation: Questions We Hear Often

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