Key Takeaways
- Your state residency status—resident, part-year resident, or nonresident—affects the tax forms you need and how you'll calculate your state taxes.
- If you're in the military, your Home of Record state generally is the state where you enlisted, and this is the state where you typically pay state taxes.
- The state where you're stationed is forbidden by federal law from taxing your military wages, but that state may be able to tax any non-military income earned while in that state.
- Permanent moves typically require actions like changing your voter registration and driver's license, while temporary moves usually involve maintaining ties to your old state.
State income tax forms
To find out what state tax forms are available for completing your tax returns you can see them on our State Income Tax Forms pages.
What if I am in the military and stationed outside my home state?
Military personnel generally designate their Home of Record as the state where they enlisted. This is where they are generally considered residents. Federal law prohibits other states from taxing the wages of nonresident military members stationed in their state.
For example: A member of the New York military is transferred to MCAS Miramar, San Diego. The Home of Record would be New York; the Duty Station State would be California. Military wages may be taxed by New York, but not by California.
Note: If the military person takes on a second nonmilitary job "in town," those wages are not covered by the Federal law. Follow the civilian rules for filing requirements for those "in town" wages.
For example: Continuing the example from above, while at Miramar, the New York military member works at a retail store in San Diego. The wages from working at the store are taxable by California. A nonresident California tax return may be required (depending on the income amount).
What if I am in the military and my spouse is not?
Spouses who are not in the military can claim a state of domicile just like their military spouse. This can be the same Home of Record as their military-spouse or a different one. The important fact is that the non-military spouse must actually establish residency in the state that is to be the Home of Record.
Am I a resident, part-year resident or a nonresident?
First, let's do the easy ones: Resident and Nonresident:
Residency is the location of your home where you intend to live when you return from a vacation or temporary business trip. You are a Resident of a state if you intend your main home to be in that state.
Example 1: You have a home in North Carolina and live in North Carolina during the year, except when you take a four month vacation in Florida. You file the resident form for North Carolina.
Example 2: You moved to North Carolina sometime sometime during the year and have North Carolina income that requires you to file a North Carolina tax return, you would file as a part-year resident in North Carolina. If you also had income from another state that required the filing of a tax return, you would also need to file a part-year resident tax return for that state.
You are typically a Nonresident of a state for tax purposes if you did not live in that state at any time during the tax year, but you did receive income that is sourced from that state because you:
- worked in the state (but did not live there)
- received income from your ownership in a rental property, S-corp, partnership, etc. that is sourced from that state, or
- received income as a beneficiary of an estate or trust that is sourced from the state
Example 3: You live in South Carolina but you work in North Carolina for one week. You file the resident form for South Carolina and file the nonresident form for North Carolina.
Example 4: You live in California and you have a rental property in Oregon. You file the resident form for California and file the nonresident form for Oregon.
Example 5: You live in New York and your great aunt died and left her Connecticut farm—which continues to operate until it can be sold—to you. You file the resident form for New York and a nonresident form for Connecticut.
Example 6: You live in Colorado and receive bank interest income from a bank in New York. You file the resident form in Colorado, but you are not required to file a New York tax return since the source of the income is money made from money (not money made from sales, workers or property from within a state).
Second, if your situation is not as clear cut as the Resident and Nonresident information above, you may be a Part-year Resident. Continue reading to determine your filing status and what to file.
TurboTax Tip:
Income sourced from a state, such as wages or rental income, generally requires you to file a tax return in that state, even if you're not a resident.
How can I tell if my time in the state was permanent or temporary?
You have to decide whether the time you spent in each state was permanent or temporary. The answer to this question determines which tax forms you need to fill out for each state, and how you calculate your state taxes.
- If you made a permanent move from one state to another, you are considered a part-year resident of each state.
- If your work in the other state is temporary and you maintain a permanent residence in the state you left to go do this work, you may be considered a nonresident of the other state.
The most important factor in determining the kind of move you made is your intent. States want to know:
- Did you intend to make a permanent move? (Whatever your intent, you need to back it up by your actions.)
- How much time did you live in the other state?
- Did your immediate family move to the new state with you?
Proving your move was permanent
You can show you intend to establish permanent residency in your new state by:
- registering to vote in your new state
- registering your car with the Department of Motor Vehicles in your new state
- changing your driver's license to your new state
- purchasing property in your new state, and moving your household to the new property
- applying for any property tax exemption or other special privilege the law allows you because your home in your new state is now your primary residence
- sending your children to school in your new state
- moving your primary bank accounts to your new state
- having your membership in any social or business organizations changed to chapters or groups in your new state
Proving your move was temporary
The IRS considers your move to be temporary if you are in the new state for work, and you expect your job in that area to last less than a year.
Caution: Although many states follow the IRS rules about how to decide if your move is permanent or temporary, some states presume that you've made a permanent move if you live there for six months or more.
The truth is that it's often easier to become a permanent resident in your new state than it is to stop being a permanent resident in your old state. In most states, even though you are presumed to be a resident after you've lived there six months, you may have to be gone from your old state for 18 months before you are considered by the time test to be a nonresident.
So, it is often more important to show your intent to leave a state than it is to show your intent to become a resident in a new one. If you end up with both states wanting to claim taxes on your income, your evidence of intent will be crucial.
If you intend for your move to be temporary, avoid doing the things we just listed for proving permanent resident status, and do the following instead:
- Vote by mail in your home state instead of changing your voter registration to the new state.
- Keep the registration for your car in your old state, but be sure to call your insurer and find out if you need different coverage because your car will be in the new state for a temporary period of time.
- Keep your driver's license from your old state up-to-date.
- Live in rented property in your new state, and maintain your household in your old state.
- If you purchase a house to live in while you're in your new state, don't apply for any special property tax exemption that you would be entitled to if it were your primary residence. If you're only there temporarily, then your primary residence is still in your old state.
- Don't move your family to the new state.
- Open a new bank account in your new state if you need it for your convenience, but keep your main bank accounts in your old state.
- If you belong to certain social or business organizations, check with the chapter, group or similar organizations in your new state to see if you can have temporary visiting membership rights. The fact that you made an inquiry about membership rights may be a deciding factor if your residency is challenged.
Most important, be sure to move back to your old state when your temporary period of residence is over.
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