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.
Can I be considered a permanent, legal resident of Arkansas in order to buy health insurance here, if I am a student and am planning on keeping my state of residence(domicile) as my parent’s home in Texas? I’m going to file taxes from Texas and keep my driver’s license/license plates/etc, but I’ll be here for a couple of years minus about 3 weeks a year and would like health insurance that actually works as in-network for this state. I’m not sure I can claim I’m a resident, which I need to do to be able to buy insurance….so I guess would I be lying if I said I was a ‘resident’ in order to buy health insurance? Or is that different than the ‘resident’ for tax purposes?
Hi Jess,
Unfortunately, the rules tend to differ between health insurance laws and tax laws. However, when it comes to taxes, you would not be considered a legal resident of Arkansas with the intent and permanent domicile being in Texas with your parents address. I do suggest taking a look at the Arkansas government website for specific guidelines on health insurance.
My question isn’t so much a tax question, just a residency issue. Im a resident of the state of Texas. My license, concealed handgun license, and truck registration reflects that. I travel a lot for work sometimes working in other states for half a year or more. My wife is a resident of Pennsylvania. Complicated yet? We both have our own residences that we had before our marriage. We haven’t sold either and or decided to reside in one place yet. I work in the oilfield industry. Sometimes when work is slow or when work brings me to Pennsylvania I will live there with her. But I haven’t physically changed my address.
My question is this, when I applied for a fishing license in the state of Pennsylvania I was told that as long as I payed state income taxes that I was a bonafied resident. Which qualified me for a resident fishing license instead of out of state. Am I a duel resident?
Hi Justin,
One thing to keep in mind is that you could be considered a state resident for one purpose (ie: a fishing license) yet still not qualify as a resident for tax purposes. A resident for tax purposes is based more on intent and your permanent place of abode or domicile. Based on the information you’ve provided above, you have no intent to permanently move to live in Pennsylvania and you are still permanently domiciled there. However, you may want to confirm by contacting the Department of Taxation for Texas because each state has slightly different residency guidelines.
Hello,
I am currently working in PA and attending the university in PA also. I am renting a place in PA. My spouse is active duty but he is stationed in Japan. We own a home in WA state and my spouse claims WA state on his Leaving and Earning Statement. My license is in PA and my car is registered in Virginia. Is there any way I can claim WA state also, or do I have to claim PA?
Also, if I did claim WA state would that effect any state grants through PA for college?
Thank you.
Hi Davis,
Based on what you have stated above, you most likely qualify as a resident of PA and will need to file a resident tax return for PA. You will need to see if you qualify as a resident of WA for tax purposes. This depends on more than just owning a house there. Some others factors taken into consideration are if you live there for any time throughout the year, if your name is also on the title, etc. To figure out if you qualify as a WA resident, take a look at the Washington government website page regarding residency.
When it comes to the grants that you are receiving through the state of PA, you’ll need to confirm with your issuer. The rules and regulations tend to be different depending on the grant.
Hello,
I am currently a resident of MO but got a job in Illinois. If I am renting a property in Illinois but worked most of the year in MO and my permanent address is in MO do I have to become an Illinois Resident or just fill out my taxes as non-resident for Illinois and file as a resident of Missouri.
Thank you,
Lauren
Hi Lauren,
You will need to see if you qualify as a resident of Illinois for tax purposes. This will strongly be determined by the amount of time you reside in Illinois throughout the tax year. If you are considered a resident of Illinois, then you will need to file a part-year resident return for MO and a part-year resident return for IL. On each return, you will be asked to report the amount of time you spent in each state along with the income you made in each state. Every state has slightly different guidelines about who is considered a resident for tax purposes. You can check the guidelines for Illinois on their state government website page, HERE.
I live in Texas and would like to know if I could be considered a resident of another state if I have family that lives there. I want to use the residency for hunting license purposes . Like can I get some sort of mail in my name sent to his address or something like that. Keep a Texas ID bit use the other address for the hunting license
Hi Daniel,
For hunting purposes, that may be possible. It sounds like you would need to find the loopholes for that though. However, to be considered a state resident for tax purposes, there are several factors taken into consideration. You can check the residency requirements on each state’s government website. Each state has slightly different guidelines so be sure to check into each one specifically.