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 live in Ohio and work from November to August and when I get laid off I stay in Michigan but I don’t work there how’s dose that work
Hello Jaarome,
Since you did not work in Michigan, you do not need to file Michigan return. You would only need to file an Ohio Resident return since you lived and worked in Ohio.
You can file part year OH and MI returns. Click here to get started on your returns today.
Great blog post.
Thank you for your kind words. We hope our blogs are informative and helpful.
Hello! I own a business in Texas that is web based and all of the clients are located in Texas. I also own a house in Texas (may be sold in next 6 months). I have been renting a house in Washington State for a few months and have decided to stay in WA full time and am going to look at buying another home here. Part of the reason I chose Washington is that there is no state personal or corporate income tax. I have an accountant in Texas and have been paying all appropriate state and federal income and corporate taxes. My accountant is looking into the issue of living in WA but I would like to draw in multiple opinions. Do you have any advice on how I would file in the future? Thanks!
If you are looking to become a resident of WA and will no longer keep your resident status for TX, then you will just have to file with Washington. However, with WA you will only need to file with them if you are subjected to their business and occupation and/or public utility tax. You will need to determine if you are subjected to these so that you can file accordingly. Here are various links to the Department of Revenue Washington State on these matters.
Washington taxes, Business and occupation tax, Business and occupation tax classification definitions
Robert,
Thanks for the reply! When you say “..you will only need to file with them(WA) if you are subjected to their business and occupation and/or public utility tax”. Is this if I begin doing business in WA and collecting revenue from within WA? If all of my business remains in Texas and can continue to receive mail at a Texas address, do I need to do anything for corporate filing in WA? My business will have nothing to do with Washington and is not registered in WA (no clients in WA, no materials in WA) and has been operating in Texas for 5 years. I was told that I would not need to take on any business or public utility tax in WA until I start conducting business in WA. I know these answers are just guidance and will continue to seek local, qualified advice.
Thanks!
I have a Florida drivers license (I use my mom’s address for schooling purposes.) We spend winters down in Florida (January 1 to April 31). However, we reside in Minnesota. I do not work, but, my husband does. (We also receive medical assistance from Minnesota for the whole family.)
Considering all of that, what state am I a resident of? Florida, yes?
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, especially as they apply to your situation. You are pretty much a resident of a state if you don’t intend to be there temporarily. It’s where your home is or where you come back to after being away on vacation. In your case, if you visit Florida in the winter and go back to Minnesota, you are a Minnesota resident.
I recently moved from St. Louis, Missouri to Ohio and got married. I still maintain a mailing address in Missouri, but not St. Louis, and go back there frequently, and rent a house there. My work address is Cincinnati. The city where my husband and I have a house has a local tax. Since my income is all based out of Cincinnati, will I only owe taxes to Ohio, or will I owe anything to Missouri? And since my withholding taxes are based on employment in Cincinnati, and does not withhold the local tax, do I have to pay that when I file, or are Ohio local taxes based on income generated from the locality (ie: are local taxes based on work location or residence)? thanks-
You will need to prepare part-year MO and OH returns as well as an OH school district tax return for the local taxes withheld by Cincinnati.
Rapidtax expertly handles such returns. Click here to get started today.