1. (1) The New York adjusted gross income of a nonresident individual includes items of income, gain, loss and deduction entering into his Federal adjusted gross income which are attributable to a business, trade, profession or occupation carried on in New York State.
2. (2) A business, trade, profession or occupation (as distinguished from personal services as an employee) is carried on within New York State by a nonresident when such nonresident occupies, has, maintains or operates desk space, an office, a shop, a store, a warehouse, a factory, an agency or other place where such nonresident's affairs are systematically and regularly carried on, notwithstanding the occasional consummation of isolated transactions without New York State. This definition is not exclusive. Business is carried on within New York State if activities within New York State in connection with the business are conducted in New York State with a fair measure of permanency and continuity. A taxpayer may enter into transactions for profit within New York State and yet not be engaged in a trade or business within New York State. If a taxpayer pursues an undertaking continuously as one relying on the profit therefrom for such taxpayer's income or part thereof, such taxpayer is carrying on a business or occupation. However, see section 132.10 of this Part with regard to the effect of the purchase and sale of property by a nonresident for such nonresident's own account.
3. (b) The New York adjusted gross income of a nonresident individual rendering personal services as an employee includes the compensation for personal services entering into his Federal adjusted gross income, but only if, and to the extent that, his services were rendered within New York State. Compensation for personal services rendered by a nonresident individual wholly without New York State is not included in his New York adjusted gross income, regardless of the fact that payment may be made from a point within New York State or that the employer is a resident individual, partnership or corporation. Where the personal services are performed within and without New York State, the portion of the compensation attributable to the services performed within New York State must be determined in accordance with sections 132.16 through 132.18 of this Part.

4. (c) If personal services are performed within New York State, whether or not as an employee, the compensation for such services includible in Federal adjusted gross income constitutes income from New York State sources, regardless of the fact that (1) such compensation is received in a taxable year after the year in which the services were performed, or (2) such compensation is received by someone other than the person who performed the services.

   1. (1) General. Where an individual formerly employed in New York State is retired from service and thereafter receives a pension or other retirement benefit attributable to his former services, the pension or retirement benefit is not taxable for New York State personal income tax purposes if the individual receiving it is a nonresident and if it constitutes an annuity as defined in paragraph (2) of this subdivision. Where a pension or other retirement benefit does not constitute an annuity, it is compensation for personal services and, if the individual receiving it is a nonresident, it is taxable for New York State personal income tax purposes to the extent that the services were performed in New York State. The term compensation for personal services as used in the foregoing sentence includes, but is not limited to, amounts received in connection with the termination of employment, amounts received upon early retirement in consideration of past services rendered, amounts received upon retirement for consultation services, and amounts received upon retirement under a covenant not to compete. For allocation rules, see section 132.20 of this Part.

   2. (2) Definition. To qualify as an annuity, a pension or other retirement benefit must meet the following requirements:

      1. (i) It must be paid in money only, not in securities of the employer or other property.
      2. (ii) It must be payable at regular intervals, at least annually, for the life of the individual receiving it, or over a period not less than half of such individual's life expectancy as of the date payments begin. For payments which begin on or after July 1, 1987, an individual's life expectancy is the expected return multiple shown for the applicable age in the table entitled “Table V. Ordinary Life Annuities—One Life—Expected Return Multiples,” promulgated under section 1.72-9 of the Federal Income Tax Regulations (for payments which began before July 1, 1987, an individual's life expectancy is the expected return multiple shown for the applicable age and sex in the table entitled “Table I. Ordinary Life Annuities—One Life—Expected Return Multiples,” promulgated under section 1.72-9 of the Federal Income Tax Regulations).

      3. (iii) It must be payable:

         1. (a) at a rate which remains uniform during such life or period; or

         2. (b) at a rate which varies only with:

            1. (1) the fluctuation in the market value of the assets from which such benefits are payable;
            2. (2) the fluctuation in a specified and generally recognized cost-of-living index; or
            3. (3) the commencement of social security benefits; or
         3. (c) in such a manner that the total of the amounts payable is determinable at the annuity starting date either directly from the terms of the contract or indirectly by the use of either mortality tables or compound interest computations, or both, in conjunction with such terms and in accordance with sound actuarial theory. The term annuity starting date in the case of any contract or plan is the first day of the first period for which an amount is received as an annuity by the individual under the contract or plan.
      4. (iv) The individual's right to receive it must be evidenced by a written instrument executed by his employer, or by a plan established and maintained by the employer in the form of a definite written program communicated to his employees.

      5. (v) In the case of a pension or other similar benefit paid to a nonresident beneficiary of a deceased employee:

         1. (a) where the employee died after retirement, if the pension or other retirement benefit he was receiving constituted an annuity, payments to his beneficiary, even though they do not meet the requirements of subparagraphs (i), (ii) and (iii) of this paragraph, will constitute an annuity;

         2. (b) if the employee died before retirement, the pension or other benefit payable to his beneficiary need not be payable for the life of such beneficiary or for a period measured by his or her life expectancy, provided that it is payable pursuant to a plan established and maintained by the employer before the employee's death, under which a pension or benefit meeting the requirements set forth in subparagraphs (i) through (iv) of this paragraph would have been payable to the employee upon his retirement. For the purposes of this clause, the employee's life expectancy is determined as of the date of his death if he was then eligible for retirement under the terms of the plan; otherwise, his life expectancy is determined as of the earliest date when he would have become eligible for retirement under the plan.

            (e) Prizes, awards and similar payments.

            Prizes, awards and similar payments are derived from or connected with New York State sources as long as they are incidental to the nonresident's presence or other activities in New York State.

   (d) Pensions or other retirement benefits constituting an annuity.

Tax Law, § 632(b)(1)(B)

(a)