You can be a resident of two states but you may want to avoid it.
If your life mostly involves just one state, filing state taxes is relatively simple. When your life involves more than one state, things can get complicated pretty quickly.
Everything depends on residency. It determines where you have to file, what kind of return you have to file, and how much you’ll be taxed. The problem is, determining residency is more complicated than it sounds. The states have convoluted and differing definitions of what constitutes a resident.
Generally, you can only be a full resident of one state. Most filers who spend time in two states end up filing a resident return to one state and a non-resident return to the other.
Is this even possible?
Yes, it is possible to be a resident of two different states at the same time, though it’s pretty rare. One of the most common of these situations involves someone whose domicile is their home state, but who has been living in a different state for work for more than 184 days. In a situation like this it is conceivable that you could be the resident of two states.
Filing as a resident in two states should be avoided whenever possible. States where you are a resident have the right to tax ALL of your income. This is regardless of where it was earned. If you are a resident of two states, you will likely end up paying more in state taxes than if you were a resident of just one, or a resident of one state and a nonresident of another.
Check the definitions
The first thing to do if you think it’s possible that you could qualify as a resident in more than one state is to check the definitions of residency. Each state has its own definition of who constitutes a resident. It’s possible that, according to the exact definitions of the law, that you aren’t actually a resident of two states.
Generally you are considered a resident if your domicile is that state, or (if your domicile is another state) you maintained a permanent place of abode in that state and spent more than 184 days there during the year.
Most state tax authorities have a page explaining what exactly constitutes a resident in their state. If you can’t find a page on their website, try checking the tax return instructions themselves. Most include a section on residency.
Make sure you aren’t a nonresident
If you only worked in a state, or lived there for a brief amount of time – in a vacation home, for example – you likely aren’t a resident. In this case, you’d only file as a resident in your normal home state. You would then file as a nonresident in the other state only if you earned money there.
Make sure you aren’t a part-year resident
If you move from one state to another during the year, you’ll file as a part-year resident in both states. You’ll be treated as a resident of each state for only the days that you lived in that state. This will help you to avoid being double-taxed. Don’t make the mistake of filing as a resident in both states if you permanently left one state and moved to another.
Exemptions for students, military personnel, expats, etc.
Most states also have exemptions for students who attend college out-of-state as well as members of the military and their spouses who often have to move from one state to another. These people are generally considered residents of their home states.
For more information about filing taxes in two different states, please refer to this blog post. And don’t forget, you can always file a return for multiple states with the help of RapidTax.
I am a resident of Texas, but two years ago I met my fiance’, and I applied for residency in California. I had moving back and forth between California and Texas. But I only work in Texas and not in California. So which states do I have to file a tax return? Thanks alot!
Hi Quinny,
You will need to file a state tax return for California along with your federal tax return. Based on what you stated above, you split your time between Texas and California. Since each state enforces slightly different residency guidelines, it would not hurt to double check the CA requirements. However, if you are a resident of California, you are liable for taxes there even if you work in a different state.
I live and work in Missouri and in mid January I moved to Colorado to take care of family. The person suddenly passed away and I have decided to go back home to Missouri. I never worked the 1.5 months I was there. I did obtain an apartment and a Colorado DL but that’s about it. I am now back in Missouri and have left Colorado completely behind. Even have my old job back like I never even left. I am wondering if I am going to have any tax liabilities to Colorado because of the short time I was there?
Hi John,
You were a non-resident of Colorado and did not have an income. You will only be liable for taxes as a working resident in Missouri.
I work in Alaska and make all my income in this state. My wife and child are Arizona residents and I am Alaskan resident. I bought a house in July and need to file state income tax how should I go about this.
Hi Tom,
From a tax perspective, it may be the simplest option for you and your wife to file a joint federal tax return and your wife to file a resident state tax return for Arizona. You will still receive all federal tax benefits for filing a joint tax return while not each having to pay for Arizona’s state tax based on a combined income. To break it down, your will file a resident Arizona state tax return and you both will file a federal joint tax return. As you probably already know, Alaska is income tax-free so there is no need to file a state tax return.
In August of 2015 I moved to Oregon to go to school. I am part of the Western Undergrad Exchange so, even though I live in Oregon, my state of residency is California. I did not make any money in 2015 in Oregon. I am also 29, so I’m independent from my parents. Figuring out information about what state I should file in and what complications could arise are hard to come by.
Thank you so much for your help.
Hi Jimmy,
Your state residency depends on that state’s specific guidelines (which differ slightly from state to state). Typically, you are still a resident of one state even if you temporarily are away in a different state for school. Residency is generally based on your intention to live in said state or not and how long you live there. Double check with both state departments just to be sure. You will most likely need to file a resident state return for California and a non-resident state tax return for Oregon. If you plan to permanently move to Oregon, you should file two part-year tax returns (one for California and one for Oregon) instead.
I’m taking a job in New Jersey and will be renting an apartment there however my husband and I still own a home in Virginia and he will be staying there. Am I a resident in NJ and he in VA? Do we each file head of household?
Hi Yvette,
Congratulations on the new job! It is smart of you to begin researching your tax obligations early on.
Each state varies slightly with their residency guidelines. When it comes to NJ, their residency depends primarily on whether or not your home there is “permanent” and how much time over the year you are physically living there. You can take a look at the State of New Jersey Department of Treasury website HERE to see if you qualify as a resident or non-resident for tax purposes. Your husband will be able to do the same for Virginia by looking at their state website.