Most earned and unearned income in New York is subject to taxation by the New York State Department of Taxation and Finance. This includes wages and salaries from employment and net self-employment earnings. Certain kinds of unearned income are also taxable, such as rental property income and retirement distributions.http://www.tax.ny.gov/pdf/2010/inc/it150_201i_2010.pdf 

Before you begin working on a state return, however, you should check the New York filing requirements. Unless you earn more than the income threshold to file, you will not be required to file a state tax return in New York. It may be to your benefit to submit a return, however, if you are entitled to a refund. For complete information regarding filing requirements, consult the New York Department of Taxation and Finance website.http://www.tax.ny.gov/pdf/2010/inc/it150_201i_2010.pdf 

To begin your state tax return, you will first need to gather all of the tax-related information for your forms. Assembling these documents before you begin will save you time once you begin your forms. You will need the following:

1. Your Social Security number
2. Your current mailing address
3. Your spouse's Social Security number and full name, if you are filing a joint tax return
4. The total of your earned income for the year - If you are employed, this will be your earnings as shown on your Form W-2 or Form 1099. If you are self-employed, this will be your gross earnings minus any applicable business expenses.
5. The total of your unearned income that is subject to New York state taxation
6. The amount of state income taxes that you have paid in during the year - On your Form W-2, this figure will be shown as your state tax withheld. If you work for yourself, this will be the total of any estimated tax payments you made.
7. A copy of your federal income tax return, if you are filing onehttp://www.tax.ny.gov/pdf/2010/inc/it150_201i_2010.pdf 
   

In order to begin your state tax return, you will need to complete your federal tax form first. You will need the figures from page one of your federal tax return to use as a starting point on your New York tax return. If you will not be filing a federal return, you may want to consult a tax preparer to help you calculate your necessary totals.http://www.irs.gov/pub/irs-pdf/f1040.pdf

Now you will need to get a copy of the tax form to complete. If you will be filing by using tax preparation software or a tax preparation website, you will simply choose New York as your state return. Then follow the screen prompts to complete the form and submit along with your federal forms.  

If you have Internet access, you can download the tax return Form IT-201 "New York Resident Income Tax Return" and the accompanying form instructions. You may qualify to use the short form Form IT-150 instead if you meet certain tests. See the Department of Taxation and Finance website for details. If you do not have access to the Internet, you can usually pick up a paper copy of the return and instructions at your local library.http://www.tax.ny.gov/pdf/2010/fillin/inc/it201_2010_fill_in.pdf 

To prepare the form on your computer, download the web fill-in version of the form. If you prefer to complete the form by hand, simply print it out to work on it. Be sure to write clearly and to use black ink to speed up the processing of your return. If you would like to file electronically, look into New York state's Free File program. You may qualify to do so for free.http://www.tax.ny.gov/pit/efile/freefile_eligibility1.htm 

To begin the form, enter your name and Social Security number, as well as your spouse's, then complete the address section. Select your filing status and then answer the questions relating to your state residency. Now, before you begin the rest of the form, you need to stop and read the tax form instructions. The instructions will explain various income adjustments and state credits that you may be able to claim.http://www.tax.ny.gov/pdf/2010/inc/it150_201i_2010.pdf 

To finish your tax return, get out your IRS Form 1040. You will use the information from it to complete lines 1 through 18 of your New York tax form. Work through all of the lines, entering the information exactly as it appears on your federal return. Follow the state form instructions until you arrive at your federal adjusted gross income.http://www.tax.ny.gov/pdf/2010/inc/it150_201i_2010.pdf 

Stop and consult the instructions to see if there any income adjustments you will need to make. Add any necessary adjustments and then subtract your eligible state credits. This will calculate your New York adjusted gross income. After you subtract your deductions and dependent exemptions, you will arrive at your taxable income.http://www.tax.ny.gov/pdf/2010/inc/it150_201i_2010.pdf 

At this point, consult the tax tables located in the form instructions to assess the amount of your tax liability. Enter this on line 39 and subtract any remaining credits you can claim. Then, you will subtract the state income taxes that you have already paid through withholding or estimated tax payments. What is left over will either be an overpayment resulting in a refund or an underpayment resulting in a balance due.http://www.tax.ny.gov/pdf/2010/inc/it150_201i_2010.pdf 

Sign and date the return and have your spouse do the same. If you will be receiving a refund, select how you would like to receive your payment. You can choose from a paper check or direct deposit. Now make a copy of the completed form for your records.http://www.tax.ny.gov/pdf/2010/inc/it150_201i_2010.pdf

Enclose the return along with a check or money order for the amount of any balance due in an envelope and send it to the address listed in the form instructions. Be sure to submit the return and any additional tax payment by April 18.http://www.tax.ny.gov/pdf/2010/inc/it150_201i_2010.pdf If you will need additional time to complete your New York state tax return, you may want to learn how to get a state tax extension in New York.