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.
Hi. I’ve lived in FL (no state taxes) since 2004. I’m looking at a move to DC. I have a town home as my primary residence, but considering renting it out. I really want to keep my FL residency, is it possible to keep my residency and work out of DC renting a place?
Hi Nicolle,
Residency rules differ a bit from state to state. Most residency guidelines are based on your intent to stay put there and the amount of time you are there with that intent. I recommend taking a look at both the Florida and DC department of revenue websites. Most likely, if you are planning to permanently reside in DC and have a Florida residence in addition to that, you would be considered a DC resident.
I need to be a resident of New York., but I have a home in GA. I will be having a home in New York as well but I need to be a resident in NY. I will work in both states. But I need to be a resident in NY. How do I do this? I am in both states. Is there a certain amount of days I need to stay in NY to be a resident.?? I need help.
Hi Angela,
State guidelines for residency tend to differ slightly. However, you can see the NY guidelines on the government website. Pay close attention to the full explanation to make sure that you apply.
I work in two different states MD and DE two different jobs. I live in MD, but have a permanent residence in DE. My full time job in De has a De address on my w-2. My job in MD wants me to put an MD address on my w-2 to avoid having to perform DE steps in the hiring process. What should I do because im not trying to commit fraud or break any laws and also my MD residence is temporary.
Hi Mark,
You’ll want to complete your W-4 form and other paperwork with your permanent address. The reason being is that you want to be sure that you receive your W-2 form come tax season. If you provide your temporary address, your W-2 will be sent there. Also, typically, you are to provide your resident address so that you are taxed correctly.
Hello,
my wife is a resident in North Carolina and I am a resident in TX. We both work full time in the states we are resident in. With TX being a community property state and NC not, do we split our total income 50/50 in between both states ? If not how do we correctly allocate income in between both states? Federal MFJ.
Hi Don,
Married taxpayers in your situation will typically choose to file a joint federal tax return and separate state tax returns. Tax law requires you to be taxed based on a combined adjusted gross income if you choose to file a joint tax return with your spouse. If you file separately for states, then you are not required to report a combined AGI. You will each be responsible, state-wise, for your individual income/tax liability.
Hi,
Right now I live in MA and pay taxes to MA but work out of state. If my address is changed to NH and I also rent an apartment in MA but mostly reside in NH, will MA Still Hose me come tax time?
Hi Eric,
If you decide to move to NH, you will need to check the residency guidelines for MA. States differ with their rules, however, it is typically based on your intentions to live in a state permanently or temporarily. You can take a look at the guidelines for MA HERE. If you are a resident (for tax purposes), then you will need to file a state return and you will be liable for taxes there.