Do you carry the burden of dealing with multiple states on your tax return?
For most of us, filing a state tax return is just another step in filing a federal return. Your tax-filing software just transfers your information to your state’s return and you’re done within minutes.
But what if you moved to a different state during the tax year? What if you worked in a state other than the one where you lived? What if you worked in multiple states? Suddenly filing state taxes becomes a little trickier and it may involve filing taxes in two different states.
Basically there are three different types of state tax returns that you need to worry about:
- Resident
- Part-Year Resident
- Nonresident
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.
Preparing your Resident Return
A resident return is the return you have to file in the state where you are a resident. This return will tax you on all of your income, regardless of the state where it was earned.
For most people this is very simple – the state where you are a resident is the one where you live and work. But for people whose lives involve multiple states, the first step to filing state taxes is figuring out where you are a resident.
Every state has different requirements for who qualifies as a resident for tax purposes. You need to visit the websites of the tax authorities of the states in question to figure out where you are a resident.
You should note that there are nine states without income tax: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming. If you are resident of one of these states, you don’t need to file a resident tax return.
Preparing your Part-Year Resident Return
A part-year resident return is for people who moved during the tax year. If you were a resident of one state for part of the year and then a resident of another state for part of the year, then you need to file a part-year resident return in the first state and a part-year resident return in the second state.
A part-year resident return taxes you on all of your income for the portion of the year that you were a resident of that state. Let’s say you started the year living in Illinois. Then in July you moved permanently to New York. You would then have to file a part-year tax return in Illinois that taxes you on all of your income you earned during the first six months of the year. Then you will have to file a part-year resident return in New York that taxes you on the income you earned during the last six months of the year.
Preparing your Non-resident Return
You need to file a nonresident return for any state (other than the state where you live) in which you earned money. This nonresident return will only tax you on the income you earned in that state.
Here’s an example. Let’s say you live in New Jersey, but you work in New York. You’ll need to file a resident return in NJ. You will also have to file a nonresident return in NY and pay taxes on the income you earned there.
Worried about being double-taxed? Don’t be. When you file your state returns, you will have the opportunity to claim a credit for the taxes that you’ve already paid to another state through withholding. The states will then settle accounts among themselves.
You may also have to file a nonresident return for any state that had taxes withheld from your paycheck. Normally you only have to file taxes in the state(s) where you were a resident and where you earned your income.
But sometimes payroll departments goof up and withhold taxes for a state you neither lived or worked in. This commonly occurs when you work for a company that is headquartered in a different state than where you work. You’ll need to file a return just so you can get that money back as a refund.
File all of your state tax returns with RapidTax!
It doesn’t matter where your company is located. If you didn’t live in a state, and you physically did not work there, you don’t have to file a return there just because the company paying you is based there, although you do if they accidentally withhold taxes for that state. If this happens, ask them to stop withholding taxes in that state so you have one less return to file!
Hopefully this information will give you some basic guidance when it comes to filing state taxes. Each state tends to have their own set of rules. It is always a good idea to do further research into your resident state and the state where you work. Whether you need to get caught up on a late tax return or file a current year return, prepare your state returns on RapidTax.
My son is attending college in MD and we are MD residents. My son interned in FL for 4 1/2 months, with his FL address (that he paid for – withheld from paycheck) on the W-2.
No state income tax in FL, so none withheld. He had earned income in MD, as well. Does anyone know how to treat the income earned in FL? Does he owe MD tax on that income? Does he need to file a part time FL return? Will his return for MD be part time?
Thanks for any help.
Hi Brian,
If you are son is listing his primary address as Florida, he would be considered a Florida resident and not pay income tax on the FL income (since FL does not have an income tax). In that case, he would file a non-resident return for MD, reporting his income received from MD sources, and would be taxed online on that income.
If your son lists his primary address as MD, he will have to report all of his income received (both MD and FL income) on his MD resident return, and probably will be taxed on all of it. In this case, he won’t have to file a non-resident return for FL (because there is no income tax).
As you can see, depending on where he lists his primary residence as will determine his tax situation.
I moved to nyc in october of last year … i did not work in california would i need to file a state return with them?
Hi Stephanie,
No, if you do not have any income from CA sources, you’ll just have to file a part-year return for New York.
Hello! I moved to Georgia from Wisconsin September 2012! When I filed taxes last year I was suppose to receive $1,500 in state taxes, I never got it! I lived in Wisconsin for 9 1/2 months & in Ga for 2 1/2 months! I don’t understand why I didn’t get my earned income money! All they said to me in the State of Wisconsin is it’s because you moved!! I don’t understand that because I lived there longer! And are there any renter deductibles or credits for renters in the state of Georgia?? I can’t find any forms, in WI if your a renter you get the homestead forms at any library! Thank you
Hi Tax Advisor,
My Thanks to you for the great advise you provide on this page. Learned a lot!
Quick question.
Year 2013:
Worked in NY for whole year.
Lived in NJ from Jan to March and move to NY and lived since then.
I own the house in NJ and rented out to a tenant. and income from this property.
Should NJ part-year resident and NY Fullyear resident?
or Part-year for both state?
and
another question,
I am selling and closing my house next week. and I am going to move back to NJ next month, still working in NY. Is this the same case? Part year for both states? or…..
Please, advise.
and thanks in advance for the advice.
Hi Daniel,
Thanks for the kind words. Happy to hear you learned a lot. Regarding your 2013 question, you’ll file a part-year resident return for both states.
If you are selling your house at the beginning of 2014, then next year, for your 2014 taxes, you’ll file a resident return for NJ and a non-resident return for NY. You’ll be taxed by NY on your income earned from New York sources only. Residency is usually based upon the state you spent the most time in during the tax year.
Our website application is actually designed for situations like yours. Basically, when filling out the state section, you will check a box saying you moved during the year and received income from another state. Thanks to this, your state tax filing will be hassle-free.
Great !!
Thank you for your clear explanation. I will try your web application.
Thanks again
I have a somewhat (or maybe not) complicated situation. I was fired from a job in NYC in 2009 and since I could not afford to remain there moved back to Kentucky. For that year, I received income from work and unemployment benefits from NY. I filed a Federal tax return and a New York state tax return for that year. I just recently received a notice and a very large bill for taxes owed from Kentucky. When I called to question this, I was told that in all circumstances taxes must be paid to the home state. Now in 2010, I paid penalties to the Federal government, New York state, and Kentucky when I was told that unemployment benefits were subject to taxes (I was unaware of this). When I contacted the NY Dept of Taxation they clearly told me they were owed but the KY Dept. helpline never gave me a clear answer since no income came from KY sources and only included unemployment benefits. Despite this, I filed taxes in Kentucky as well because I was scared to owe when I lived the entire year in the state. To be honest, I totally forgot about the 2009 taxes. What is my recourse for this situation? I’m neither an accountant or tax attorney so I don’t know the ins and outs of tax laws but shouldn’t KY have caught this back in 2010 when I filed the other delinquent taxes? Also, can I file a late return and claim the taxes paid to NY or at least dispute the fees and penalties for this bill?
Hi Jeri,
Since you moved back to Kentucky in 2009, it sounds like you were a resident of Kentucky for that year. Saying that, you were required to file a part-year resident return for Kentucky, reporting all income you received (regardless of earning it in that state or other states). They should have caught this back in 2010, as you mentioned, although I do not know the exact state tax laws for all states.
I would file the late return as soon as possible and be sure to note the taxes paid to NY in the tax return. You should file the taxes as soon as possible because any tax due or late fees will continue to increase as time passes.
You can file prior year tax returns on our website, simply go to the create an account page on our site and select the 2009 tax year from the drop down menu. You can get started right away. While filing, if you have any questions at all, you can contact our RapidTax experts via phone, e-mail or live-chat at the available hours.