If you live in one state and work in another, you’ll need to file two tax returns
When it comes to filing state taxes, it can get confusing, especially if you spend time in multiple states. You may be wondering if you can even be a resident of two states or if you’ll need to file taxes to more than one state.
The RapidTax team is available to help you with tax questions you may have. In fact, you’ll be able to report your income from multiple states with RapidTax!
There’s a variety of reasons why you consider yourself a resident of more than one state.
For example, you could;
- have moved during the year
- work in a different state than you live in
- work in multiple states
- spend a large amount of time with family or spouse in a different state
- have multiple houses in various states
- spend summer in the north and winter in the south (lucky you)
Whatever your case may be, the most important rule of thumb is to file a resident return to the state you spend the most time in while also filing a non-resident return to any state you earn income in.
3 Types of State Tax Returns
There are three types of state tax returns. Your residency status in that state will determine what type of state return you’ll need to file. The three types of state returns are;
- Resident Return: You’ll file a resident return to the state where your main home is located for the entire tax year.
- Nonresident Return: You’ll file a non-resident return to a state you either lived in temporarily or received income from.
- Part-Year Resident Return: You’ll file a part-year resident return to a state if your main home was located there for a portion of the tax year. In other, words if you moved to or from that state.
Working in A Different State than You Live In
If you work in a different state than you live in, you will end up having to file a resident return in the state where you live and a nonresident return in the state where you work.
If you live in a state with an income tax, you must file a resident return there. But if you work in a state without an income tax, you don’t have to worry about filing a nonresident return.
Here are a few things to keep in mind when filing state tax returns;
- your resident state (the state you live in) has the right to tax ALL of your income, wherever it was earned
- the non-resident state (the state you work in) can only tax income earned in that state.
- if you worked in multiple states that you don’t live in, you’ll need to file a non-resident return for each state
- you’ll have an opportunity to claim a credit for taxes paid twice
- there are seven states without an income tax: Alaska, Florida, Nevada, South Dakota, Texas, Washington, and Wyoming
- Tennessee and New Hampshire tax only interest and dividends
If you moved from one state to another during the tax year, you’ll need to file a part-year resident return to each state.
For example, if you moved from New York to Georgia during the tax year, and Georgia is your new home, you’re considered a part-year resident of both New York and Georgia. That means you’ll need to file a part-year tax return to both New York and Georgia. In the following year, you’ll file a resident return to Georgia (unless you move again).
Don’t stall on your late state tax returns.
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Even if you have to file multiple state tax returns you can take care of them with RapidTax. In fact, our team is ready to help you with any tax questions you may have!
I own a home in SC. My company offered me a job in OK as they were closing SC, and I moved there during the 2017 year because I could not find a job in SC. My wife and kids still live in SC. I rent an apartment in OK and primarily live/work in OK even though I have a mortgage in SC and pay property taxes there. My wife earns income in SC as well. I accepted an offer to work in OK permanently but will be seeking employment in SC after one year.
1. Would my intent be considered permanent in OK or temporary if I personally plan to leave after one year?
2. Do I fill out my State of OK W4 with my SC address or OK address?
3. I assume SC will consider me a full-time resident, and I called the OK state tax commission; they consider the same. Is it possible for me to avoid paying dual state income taxes for the income I earn in OK?
4. Do I have to claim my wife’s income earned in SC on my OK state income taxes? Would it be better to file separately?
Because you have lived in SC for part of the year and have moved to OK, depending on how long you have lived in SC for 2017, you may be able to file part-year resident forms for SC and for OK. If however, you cannot it would be best for you to file separately, however, you would both need to choose which deductions to take and who will be claiming the children, as only one will be eligible to claim these reportings.
I moved from N.Y. to TN in Nov/Dec of 2016. I still work in N.Y. I go back and forth between the two states, sometimes working online for the same N.Y. employer from my home in TN. My residency is with TN. I do not work in TN. I have a space I rent in N.Y. to sometimes stay if it’s a busy in-shop work week for me.
What do I do and how do I go about it?
It would be best to file a part-year NY return for 2016. However, since you resided in TN in 2017 and worked in NY, you will need to file a Non-resident NY return for 2017. Provided that you did not receive any dividend or investment income from TN, then you do not need to file a TN return since TN is one of the states with no income tax.
I moved to VA in April 2014, but my primary residence is and will remain in WA state. I own a house in WA, I vote in WA, and I rent in VA. I pay state income taxes on income earned in VA. Which residency designation should I use for filing VA state income tax? Are there also different federal forms for out of state residents?
Hi Ron,
Since each state has their own set of guidelines for who qualifies as a resident, I suggest first taking a look at the VA government website to see if you qualify as a resident since you do reside there. It seems as though you may need to file two resident state returns (one for WA and one for VA). If you are NOT considered a resident of VA, then you will need to file a non-resident state return for VA.
I m landed immigrant in california but now i m livjng in north carolina but just find out that in my paystub still paying california tax what to do about it how to cancel one state residency
Hi Nida,
You will need to update this information with your pay roll department as soon as possible. When you receive your W-2 at the end of the year, you will see that both states are listed in box 15. This means that you will file two state returns along with your federal tax return.
I am currently living in Michigan and moving to SC as of Nov 1st 2014. I will not be working for the remainder of 2014 after I move. I am renting a winter condo in SC and do have a source of income from social security – survivor benefits monthly. I am planning on staying in SC and will be establishing residency but am unsure if renting a condo is considered a resident or not. Will I have to file taxes in SC? If my only source of income is from social security, do I even have to file anything?
Hi Dawn,
Since every state follows their own guidelines for who is considered a resident for tax purposes, I suggest taking a look at the South Carolina State Government website for their specific rules.
Also, there is a tool on the IRS website that can help you to determine if you need to file a tax return or not. It will ask you a few specific questions such as your income, residency,etc.