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.
Hello,
I recently moved from Massachusetts to California in April 2014. I moved in with a family member. I started work in October. So I don’t know if I am considered a resident. It has been more than 6 months that I’ve been here. I don’t own any homes and I was living with my parents before I left Massachusetts and most of everything (bills, car note, insurance) is still under that address. The only income I was receiving for this year before I started my new job was unemployment. I was collecting Massachusetts unemployment insurance from January – June 2014.
1. How should I file my 2015 taxes?
2. When I filled out my w-4 on my new job, should I be filling it out as a California or Massachusetts resident?
Hi Latoya,
When it comes to residency, each state’s guidelines are slightly different. I suggest taking a look at California’s specific rules to see if you are a resident. Once you see where you are a resident, you will be able to update your W-4 form.
When filing your taxes for this year, you will most likely need to file a part-year resident state return for California and a part-year resident state return for Massachusetts.
My husband and I work in a boarding school and in MA and live on campus, as a condition of our employment. We pay no rent or utilities other than phone and internet. We own a house in NH and spend most weekends there as well as all summer and ten other weeks per year. Our mail is delivered to our MA residence. What do we need to to in order to be considered residents of NH so that we can deduct our mortgage interest and property taxes?
Hi Claudia,
I suggest taking a look at the New Hampshire government website. Each state follows their own requirements and criteria for who is considered a resident for tax purposes.
My husband and i are moving to New Jersey (from New york) he works for the city as a NEW YORK CITY HOUSING WORKER…our concern and my question is will he have to pay two taxes, one because he works in New York and another because he lives in NJ. How can we avoid this if so? Thanks for the HELP
Hi Keya,
You will always be taxed in the states in which you live and work. However, if you receive your W2 and only one state is listed, then you are only responsible for filing a state return with that state.
As a general rule, you have to file a resident tax return in the state where you lived, a part-year resident return in any state you moved to/from, and a nonresident return in a state where you earned money but didn’t live.
I work three weeks on in Alaska (no income tax) and three weeks off in HI (income tax) with my wife and children. My wife does not work and both of my children are not in school. Because of traveling time and stays with family in Alaska, I am in AK more days than I am in HI. However while in AK (oilfield) I live in a camp not accessible to civilians and pay no money for expenses. As I am really uninterested in giving any more of my hard earned money to the government my question is this, is there any way they would know any difference if I just continued filing AK residency as I have for my entire life rather than let them know I am currently residing in HI in a house I rent. I only brought up the very specific details because I felt some helped and some hurt my case. Also I plan on not filing for a permanent fund dividend check for any of my family (each application has detailed questionnaires about residency) the $8000 dollar loss there is more than the difference in filing in an income state tax state (HI). Also we still retain a physical and mailing address in AK and only a PO box is used in HI. I know this sounds some what dishonest but also think with my work and other time spent in AK I should be able to maintain my residency. This is all hypothetically speaking of course.
Hi Jack,
Each state follows slightly different guidelines when it comes to who is considered a resident for state purposes. I suggest taking a look at Alaska’s government website page and possibly contacting them to see if you meet the residency requirements. IF, by chance, you are asked to provide documentation for your Alaska residency, you will be able to if you do meet the requirements.
I work at a govt job in NY that requires me to be a resident. I rent in NY, but I also own a home in CT that I stay at alot because I have family that live there. Could I still be considered a resident of NY or both and still keep my job?
Hi Sabrina,
When it comes to residency, states tend to each have their own specific requirements. I suggest checking the New York State Government website for the guidelines.