CT will pay you to beat New York in court. Almost no one can collect.

Last July, Connecticut passed a law that reads like a dare.

Public Act 25-172 promises a Connecticut resident who pays New York income tax on days worked at home in Connecticut a credit equal to 60 percent of the extra Connecticut tax that results when the state recalculates the credit it gave for that New York tax.

The act also waives penalties and interest on the late Connecticut tax. It reaches back to tax years beginning in 2020.

The target is New York’s convenience-of-the-employer rule. One sentence of New York regulation says a nonresident’s days worked outside New York count as New York days unless the work was done out of state “of necessity, as distinguished from convenience.” New York’s 2006 guidance confines the rule to employees whose primary office is in New York and excuses a home day only when the home is a “bona fide employer office.” A Connecticut resident with a Manhattan employer who works Fridays in Fairfield pays New York tax on Friday.

To collect Connecticut’s 60 percent, the resident must do four things, and the act joins them with “and.” Pay the New York tax. Apply to New York for a refund and be denied. Appeal that denial to a court or tribunal. Obtain a final decision ordering New York to refund the tax.

On July 2, the Appellate Division, Third Department, the court that hears appeals from New York’s Tax Appeals Tribunal, ruled against Edward Zelinsky, a Connecticut resident and law professor who has been fighting this rule since his first Tribunal decision in 2001. The Tribunal had ruled against him in May 2025. The court found “no constitutional or other infirmity” in the rule, said the debate over remote work “remain[s] the province of the Legislature,” and saw “no basis to disturb the Tribunal’s determination sustaining the taxation.” The one road the act requires a resident to travel, denial, appeal, and a final win, was just closed again by the court at the end of it. As far as I can find, nobody has yet qualified for the credit, and after July no one is likely to.

There is a second problem, and it is Connecticut’s own.

Since tax years beginning in 2019, Connecticut has had the same rule. Section 12-711 of the General Statutes counts as Connecticut income the pay of a nonresident for “days worked outside this state for such person’s convenience if such person’s state of domicile uses a similar test.” The Department of Revenue Services says plainly that for a New York resident working from home for a Connecticut employer, “Connecticut will apply the New York ‘convenience of the employer’ test.”

Connecticut taxes New Yorkers at home in New York exactly as New York taxes Connecticut residents at home in Connecticut. The act pays Connecticut residents to attack, in New York’s courts, a rule Connecticut keeps on its own books.

What actually protects a Connecticut commuter is older and duller than the bounty. Section 12-704 gives residents a credit for income tax paid to another state, claimed on Schedule 2 of the CT-1040. The instructions to that form define qualifying income to include compensation “for personal services performed from a home office in Connecticut for an employer in a qualifying jurisdiction that applies a convenience of the employer test.”

In plain terms: Connecticut already credits the New York tax on those Fridays. The credit is capped at the share of Connecticut tax that the New York income represents, and it cannot push Connecticut tax below what would be due if the New York income were left out, so a resident still pays the difference where New York’s tax runs higher. But the resident is not taxed twice on the same wage. The commuter who files Schedule 2 correctly and attaches the New York return, as Connecticut requires, is made whole to the extent Connecticut law allows, with no lawsuit.

If the General Assembly believes the convenience rule is unjust, it has two honest options. It can repeal Connecticut’s mirror of the rule, which would cost the state revenue from New Yorkers and would at least match its words to its conduct. Or it can pursue what no two of New York, New Jersey and Connecticut have ever signed: a reciprocal agreement. New Jersey’s only such agreement, with Pennsylvania, covers wages and nothing else. A bounty for winning a case the courts have now rejected three times is neither.

In the meantime, Connecticut residents with New York offices should do three things this filing season. Keep a day log; New York audits these. Ask the employer, in writing, whether the home office meets New York’s bona fide employer office test. And claim the Schedule 2 credit, with the New York return attached. The remedy is already in the instructions.

Myung Keon Kim is a certified public accountant licensed in New York whose practice prepares New York, New Jersey and Connecticut returns for individuals and small businesses.