I Moved to Another State During the Year
If you moved to a new state during the year, you will normally file part-year returns in your old state as well as your new state.
Many states have a form specifically for part-year returns (often designated by the letters PY), whereas other states use the same form as residents and/or part year or nonresidents. TurboTax will generate the correct form for your particular state and situation.
The forms generally ask you to enter the dates for the period you lived in each state. Some states ask only for the income from their state, others may ask about all of your income and pro-rate the amount based on the period of time you lived in the state.
TurboTax will step you through the process for each state. We recommend you start with the state you currently reside in, then complete any additional state returns. For more about part-year returns, see How Do I File a Part-Year Resident State Tax Return?
Example 1: Moved to a new state
Joe lived and worked in New York for years. Last summer, he found a better job in Pennsylvania, and in September he moved there to work for his new employer. This year, he will file part-year returns for both New York and Pennsylvania. In subsequent years, he will only need to file a Pennsylvania return.
Example 2: Live in one state, work in another
Mary lives in New York and commutes to her job in Pennsylvania. Every year she files a resident return for New York plus a nonresident return for Pennsylvania.
Example 3: Lived in one state, moved to another, but one person still works in the first state
Joe and Mary file as Married Filing Joint, lived in New York (NY) until August, then moved to Vermont (VT). Joe still works in NY but Mary now works in VT.
- They first need to jointly file a Part-Year Resident NY state return for Jan 1st through August when they physically left the state, and report on that return all of the earnings they both made during that period.
- Then Joe needs to file a Non-Resident NY state return for the period of September through December 31st for the NY wages he made during that period.
- Then Joe and Mary will jointly prepare a Part-Year Resident VT state return for September through December 31st and report both of their earnings (his for NY and hers for VT). But they will attach Joe's NY Non-Resident NY state return to the VT state return as VT will give a credit or deduction for the amount of taxes paid to NY from September to the end of the year. In this example, VT allows a credit or deduction so Joe and Mary are not taxed twice by both states.
Example 4: Moved to a new state with income from both states
Joe lived in California (CA) on severance pay and unemployment until June, then moved to Idaho (ID) for a new job. California does not tax unemployment, so he would like to show the unemployment and severance pay on the CA state return, and the ID income on the ID state return. This would result in Joe's lowest tax obligation.
As Joe is now a resident of Idaho, this is what Idaho (and many other states) says: "Idaho residents are taxed on all income, including income from outside of the state." So Joe will have to report all of his income, including CA unemployment and severance pay, and his ID pay, on his ID state tax return. Idaho will allow a credit for taxes (if any) paid to other states for income reported on both states tax returns (the unemployment and severance pay in CA).
There is no "election" aspect to the process. Refer to the tax rules and legal requirements for the states you file tax returns in. By answering all of the questions in TurboTax, we will take you through the process of figuring out who taxes what in your state returns. But first start with your resident states in order, then add any part-year or non-resident states.
If in this situation the first state was South Dakota (SD with no state income tax, all of Joe's income would be taxed in ID and there would be no credit for income taxes from another state (zero in this case). Often, if no other state taxes your income your resident state (or if you live in a no income tax state, the state you earned income in) will tax your income.