This article addresses the most recent challenge to the New York State Tax Department’s rule, which we refer to as “The Convenience Rule” in the Matter of Edward A. and Doris Zelinsky for the tax years 2019 and 2020. Edward A. Zelinsky was a professor of law at the Benjamin N. Cardozo School of Law of Yeshiva University in New York City (Cardozo) and earned New York source income in 2019 and 2020. His primary residence was in Connecticut. This case was decided against the Zelinskys by an administrative law judge (ALJ) but was then reviewed by the New York State Tax Appeals Tribunal. The decision—another loss for the Zelinskys—was issued May 15, 2025.

The Zelinskys had previously pursued this issue for tax years 1994 and 1995, which resulted in a loss. Once again, as in the 1994-1995 case, it was argued that The Convenience Rule, as it was applied to Mr. Zelinsky, is in violation of the Due Process and Commerce Clauses of the US Constitution. I do not want to spend time on this issue other than to state that this has been argued before by the Zelinskys as well as other taxpayers and failed. It failed again this time.

The primary difference in the current case is that Mr. Zelinsky’s employer, Cardozo, closed its doors in 2020 in compliance with the executive order issued by Governor Cuomo due to the COVID-19 pandemic. Mr. Zelinsky felt that he had no choice but to work from home; therefore, he worked from Connecticut out of necessity, not for convenience.

In essence, The Convenience Rule states:

In determining the New York source income of a nonresident employee, section 132.18(a) of the personal income tax regulations provides that: If a nonresident employee performs services for his employer both within and without New York State …

… any allowance claimed for days worked outside New York must be based upon the performance of services, which of necessity, as distinguished from convenience, obligate the employee to out-of-state duties in the service of his employer. The key factor is the phrase: obligate the employee to out-of-state duties.

In this situation, the word obligate means there must be a business reason for the employee to work in that location, such as visiting a client or assisting with a project located in a state other than New York. 

Many taxpayers and practitioners have assumed that if the office is unavailable, then employees must work from home. If that home is in Connecticut, they further assume that they are required to work from Connecticut and are not subject to New York's convenience rule. This may be a reasonable assumption, but as the Zelinsky case clarifies, if there is no business purpose for the work to be done in Connecticut, the income must be sourced to New York.

The fact that an employee’s home is in Connecticut doesn’t mean that there is a business reason for the work to be done in Connecticut. If the employee’s home were in New York, the same work could be done just as well. It has been established that two employees of a New York company working from home, when one employee’s home is in New York and the other employee’s home is in Connecticut, should not receive different tax treatment.

In a previous case also reported on by this author (The Bryant Case), the ALJ implied that if an employee can prove they were ordered to work from home, they might be justified in claiming that working from their out-of-state home was a necessity rather than a convenience. This tribunal’s decision clearly indicated that being directed to work from home does not constitute an obligation to out-of-state duties, as there is no business reason for the work to be done in Connecticut.

New York State has previously explained its position in tax bulletin TSB-M-06(5)I that in order to claim business purpose outside of New York while working at home, your home must be a bona fide office of the employer's business. Please see TSB-M-06(5)I for further details as to what qualifies as a bona fide office. Meeting these qualifications would probably lead to the business now having nexus in the other state. Mr. Zelinsky did not make a bona fide office claim. Some employees do qualify under the bona fide office rules, so it is definitely worth looking at.

The Zelinsky tribunal case was not all bad. In the ALJ version of this case, the ALJ brought up related issues that affect The Convenience Rule. Another exception to The Convenience Rule is based on the Hayes decision, Hayes v. State Tax Comm’n (61 AD2d 62 [3d Dept 1978]), which, in effect, said The Convenience Rule does not apply if the employee spends zero days in New York during the year. In other words, if all working days during the year are spent outside of New York, then The Convenience Rule does not apply. Furthermore, the days working from home are not deemed to be New York working days as they would be if there were days worked both inside and outside of New York.

Zelinsky claimed that he qualified under the Hayes decision since he worked exclusively outside of New York from Mar. 15 through the end of the year. The ALJ stated that there was no rule excluding the beginning of the year (Jan. 1–Mar. 14); therefore, during the year, Zelinsky worked both inside and outside of New York. I agree that this makes sense, but Hayes would still apply if all work was done outside New York.

More concerning, however, was that the ALJ questioned the relevance of the Hayes case for the remote workforce of today.

Mr. Zelinsky taught classes and connected with students via Zoom. The ALJ cited the Wayfair sales tax decision from the Supreme Court and stated, “In this modern economy with its internet technology, one can be present in a state without needing to physically be there.” (cf. Wayfair, 138 S Ct. at 2094-2097) The ALJ's comments threatened to disturb what has been a safe harbor from The Convenience Rule. The good news is that the ALJ’s comments do not set a precedent unless confirmed by the tribunal. The tribunal did not address this issue, allowing it to die for the time being. The issue did not need to be addressed, because Zelinsky clearly acknowledged working some days in New York City at the beginning of the year.

In Conclusion

If Zelinsky carries this case to the next level, he will have another opportunity to argue constitutional issues as well as whether The Convenience Rule applies to a taxpayer who does not have available office space in New York provided by the employer.

In the meantime, it is important to note that the New York State Tax Department consistently wins these cases, and for taxpayers who split time between New York and an out-of-state home, all wages are reported as New York source. Your best opportunity to win on this issue is if your personal residence qualifies as a bona fide office of the employer under TSB-M-06(5)I.

It is also important to note that if you work 100 percent remotely and do not work any days in New York, you still benefit from the facts in the Hayes case and should not report wages to New York. Some employees fail to qualify under Hayes because they come into New York for a few meetings a year. I recommend holding those meetings remotely or meeting out of state to maintain the safe harbor of zero working days in New York.