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 work for a company that is based in GA, and my primary residence has been in GA. However, we own an house in Fl, which we use on weekends. Since March 15th, I have been able to work remotely in my home in Florida. Up until now I have been having GA income taxes deducted. From June 1st I will be working full time remotely from my Florida home. (I have already set up Florida as my primary residence, Drivers license, mail changes etc) I assume that from this point I am no longer required to pay GA taxes? What exactly is the process required to request my employer to stop deducting GA taxes?
If your residency has changed to FL you should notify your employer in order to have your W-4 form updated so that GA will not withhold taxes from your income.
My wife and I have both retired. We have enough money that we no longer need to work. I live in NC now but just bought a house in GA. We will be staying at both places about 2 weeks each a month since they are only a 4 hour drive away. Will I need to file residency in both states since I will be paying property taxes in both. Will this also require us to get drivers license in both too.
You are advised to check with GA tax authority to determine what constitutes a resident of that state. You will be required to pay property taxes in the States where your residence are located.
I am a long time resident of Colorado. I have been offered a job in South Carolina. I want to maintain my Colorado residency by maintaining an apartment that I have a lease for one year. I am willing to pay taxes in both states. How long can I live and work in South Carolina as a non resident?
You will be considered a South Carolina resident if you reside in South Carolina for more than 12 consecutive months.
My wife and I currently reside in NJ. I have taken a new position in MD in early 2017. My new employer currently utilizes a Relocation firm for people relocating. I have a daughter in a NJ high school and don’t expect to relocate fully into MD until 2018 so my daughter can graduate in NJ. For MD domicile purposes I consider my domicile to be in NJ as I vote there, have my driver’s license still there, family there and go home on the weekends to NJ.
Here’s the catch, MD requires you to file as a permanent MD resident if you are domiciled in MD OR maintain a place of abode in MD for more than 183 days. My question is if I use temporary living accommodations through a relocation company and stay in a single MD address for more than 183 days in 2017, but I do not lease directly with the MD landlord (so I don’t technically have the place of abode in MD rather the relo firm does and then allows me to be an occupant of it) as the relo firm leases directly and the company that hired me pays for the lease (of course my employer will add such income to my W2 wages at year end). Does that mean I have tripped the 183 day resident rule and therefore am required to file as a permanent resident for MD state income tax purposes?
If you were physically present in MD for 183 days or more, MD considers you a resident. I advise you contact the MD State department of revenue for more information regarding your filing requirements.
Hi,
I live in CA. My Dad is sick so I’m putting my stuff in storage here and moving back to live in his house for at least the summer. My lease is up here so it doesn’t make sense to keep a physical residence. Will I know be considered a NH resident? I don’t know where I’ll end up after the summer. I may come back or I may stay there longer.
Residency rules vary from state to state. Some states consider you a resident if you spend more than a certain number of days in that state. My advice to you is to check with your State Department of Revenue for specific residency rules as they apply to your situation. In your case if you visit your dad in NH during the summer, then go back to CA, you are a CA resident. If you decide to stay in NH and live there for the rest of the year, then you will be a NH resident.