How does TurboTax determine which state(s) I need to file in?

We gather information from your federal return to determine which state returns you need to file. We primarily base this on where you lived during the year and where your income was earned. In general, if you earned income from sources in a state (whether or not you lived there), you need to file a return to report that income and pay any taxes you owe.

Example 1: You lived and worked in California for the entire year and received rental income from a property in Arizona. In addition to your resident return for California, you will also likely need to file a nonresident return in Arizona to report the rental income you earned there.

Example 2: You lived and worked in California for the first few months of the year, and then moved to Arizona where you started a new job. You will need to file part-year resident returns in both California and Arizona. In each part-year state return, we'll help you enter the income that applies to each state.

There are some exceptions, of course. Most states have filing thresholds, meaning that if you do not earn over a certain amount in that state, you don't need to file a return.

Also, some states have reciprocal agreements with other states. That means that if you live in one state and work in another, you only need to file in one state. More info.