How does NY (or any other states that tax income) enforce taxes on nonresidents? Assume the taxpayer does not file state return with NY and does not have NY on W2.

Seems NY would have no way of targeting said taxpayer for audit. Thoughts?

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Assuming you are addressing an individual, usually it comes from reviewing tax filings or the books and records of their employer. If an individual is working in NY over the de minimis amount, the employer generally would be withholding NY tax. That would be reported on the W2 to the employee and the state. Assuming your scenario of it not being on the W2 implies that didn’t get directly reported, it will be harder to be “discovered” by the state, but far from impossible. The DOR often audits employers, and they have been known to review things like leases and other records people may generate in NY or NYC. The tax is high and people try to go out of the way to avoid it, so they are better than the average state of figuring it out.

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If you own property in the state, the Dept of Taxation and Finance will have access to this data. If you are employed by a NY employer, they will also be able to see this.

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