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 am a resident of NJ but have been working in Indiana for what will be a total of 354 days. When I file my taxes will I be considered a resident of NJ and a non-resident of Indiana being that I will have worked there for less than 365 days, and also can I claim the max amount of per diem that the state of Indiana allows?
Hi Roland,
Although each state has their own set of guidelines, the general rule is that you are considered a resident of a state for tax purposes if you have been present in that state for more than 183 days (half a year). I strongly advise you to contact both the state Department of Revenue for NJ and for IN.
This is more for college purposes than taxes. I lived in West Virginia for 4 years with my father; from 7th to 11th grade. After 11th grade ended I moved to Georgia to live with my mother. If I live here for a year then move back to West Virginia to go to college, would I be considered in state or out of state?
Hi Matt,
There is a group called the Southern Regional Education Board. What this group has done is put together a program called the State Doctoral Scholars Program (SREB). What this does is group together the 16 most eastern-southern states, including both GA and WV. The participating education institutions offer in-state tuition to students accepted from participating states. I would strongly suggest contacting them to see if the school(s) you are considering are eligible for this. You can check that out HERE.
i live in Arkansas, but I want to go to college in Texas, with the out of state tuition is too much for my middle class family. Is there a way for me to get dual residency? i have family and friends in Texas, and i am only in my junior year of high school, is there a way for me to be a resident of Texas but finish my high school career here?
Hi Janice,
Although you may not be able to obtain dual-residency, there are a few routes you could take. The first step I would advise you to take is to call the college or university bursar office that you are interested in to see if they have any options you could take. You’re starting your search earlier than most which may leave you room to apply for scholarships and/or financial aid options. Also, since Arkansas and Texas are neighboring states, Texas colleges may offer some leniency to crossing state borders and paying a discounted tuition.
Another alternative is to take what is known as a “gap year”. This means that you take a year in between high school graduation and freshman year of college to relocate to the state you want to attend college in and earn your residency. If this option appeals to you, be sure to really research the school of choice as it is a big decision to make. The best thing you can do is start contemplating early (which you are).
Can a person live six months in one state and six months in another state and claim residency. In both
Hi Sherrie,
In a situation where you live in one state for part of the tax year and then move to another state for part of the tax year, you would need to file a part year resident state tax return for each state. This will allow you to report how long you resided in each state and the income you earned.
Iam trying to find out if I buy a second house in pa for weekend use and vacations and stay in nj and pay school taxes were I live do also have to pay a school tax in pa even if my children don’t go to pa schools thanks
Hi Sherrill,
The confusing thing about school taxes is that they are not an individual amount. They are included in the amount of your overall property taxes. If you decide to buy a second home, you can deduct the property taxes on that. Therefore, you’ll still need to pay the taxes throughout the year but the deduction will essentially lower your tax amount due to the IRS after filing your taxes for the year. The deductible amount could change depending on if you rent out the property or use it as a second home.