I trade for a prop firm in NY and I also reside in another state. My accountant says that I have to pay NY income taxes and the income state taxes of the state I reside in? I can't imagine that this is true? opinions?
Yeah, but is he saying you have to pay a full year's worth of tax to each state, or that it would be a partial year's tax to each state based upon your residency split?
If the firm has market-making activities in NY and you receive a schedule K-1 for your share of income/(loss) from the firm, it is certainly possible. It is possible to have income sourced to two different states. Your resident state might have a credit available for taxes paid to NY which should lower your resident state income tax liability.