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.
In mid Jan 2016 I I moved from VA to NC while working in Va. How do I file state taxes?
You may have to file a part year return for VA and NC. Rapid tax expertly handles part year returns. Click here to get started today.
I am in the military with an established domicile in South Carolina. I also own rental property there. My new job assignment is in New Jersey but I have purchased a home close by in Pennsylvania to live in. I spent just over 184 days in PA after relocating, which appears to make me a “statutory” resident per the PA website. Does this mean I must file resident returns for both SC and PA? I can’t determine if the military exception applies, especially since I am stationed in NJ, not PA.
Thanks –
My husband lives and works in CT and rent an apartment their too So can we take off our rent of apartment their. He would have drive back up to northern nh which is 5 hour drive each way to get back to work. There no jobs in northern nh for a job and have to move to their and we are unable to sell our home…
I am a teacher in Virginia and I own a home here. I also own property out of state where I live on weekends and during the summer. My school contract is a total of 180 days.
From the Virginia tax/treasury website:
“Resident — A person who lives in Virginia, or maintains a place of abode here, for more than 183 days during the year, or who is a legal (domiciliary) resident of the Commonwealth, is considered a Virginia resident for income tax purposes.”
I would like to put my Virginia home into an LLC and rent it back to myself from the LLC during the school year. I know that I would owe real estate taxes through the LLC, but that way I would own no property personally in VA.
If I did that and then registered to vote, got my driver’s license, and registered my vehicles in the second state, would that be enough for me to be considered a non-resident for tax purposes?
Thanks in advance for your help with this.
I believe there may be issues with the teaching credential in the state you teach if you do not have a drivers license in that state. I would check into that before changing.
Hello, not sure how to put this all, hoping you can understand it.
My family and I moved from Washington State to California 10 months ago. So now living in CA and still owning a house in WA, but renting it out privately and I also still commute to WA for work. I work on the water in WA, so I live on a boat and work more then half the year in WA. My employer won’t take CA state taxes out, so I have to pay them on my own, right? Also the house we are staying in is a family owned house in California. Nothing is in our name. My wife is a stay at home mom but the only thing is our kids go to school here in CA. We still hold a WA license our vehicle still have WA plates on them. So my question is, do I still have to pay CA state taxes even though I’m gone more then half the year? Also can I keep my WA license and still live in CA? If I do have to pay state taxes in CA can my wife and I file separate? I file in WA and she can files in CA? What’s the best way for me/us. The big thing is WA doesn’t pull out State taxes and CA does. I don’t like losing 4K a year now haha. Please help, any info will be helpful! Thank you so much!
A local accountant might be the best option for you to ensure that you are filing your taxes correctly. As a Part Year (PY) resident you are only required to report the income earned in California (CA) to CA. You will have to contact the department of transportation to determine the requirements for residency status.