What to know about filing taxes in more than one state

What to know about filing taxes in more than one submit trope : Young businessman biking to work from one state to another, city horizon in the background. If you ’ ve earned income in multiple states, tax time can get slippery. here are some common reasons you might need to file multiple state returns and how to do it good. editorial note : Credit Karma receives recompense from third-party advertisers, but that doesn ’ deoxythymidine monophosphate affect our editors ’ opinions. Our third-party advertisers don ’ t review, approve or endorse our column content. It ’ randomness accurate to the best of our cognition when posted.

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Filing taxes in more than one state sounds intimidating, but it doesn’t have to be.

If you ’ ve earned income in more than one state, or live in one and work in another, you may need to file more than one state tax return key .
While needing to file doesn ’ metric ton change your federal tax refund at all, it can however make tax prison term a small more nerve-racking. As a result, it ’ south important to know when you might be required to file multiple department of state tax returns and how to do it .
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Four reasons you might be filing taxes in more than one state

A few situations may require you to file taxes in more than one state. park scenarios include the follow .

You moved

If you moved from one country to another during the class and both states withhold income taxes, you might need to pay state taxes on a prorate footing depending on how retentive you lived and worked in each department of state .

You live in one state and work in another

If you or your spouse — if you ’ re marry filing jointly — cultivate in a different state from the one in which you reside, you may have to file more than one state tax return. But you generally don ’ t have to pay taxes to both states .
preferably, you ’ vitamin d pay taxes to the country in which you worked, unless the two states have a multiplicative inverse tax agreement. In that subject, you can pay taxes to the state in which you reside .
“ A state reciprocal tax agreement is an agreement whereby one state agrees not to tax employee recompense, subjugate to employer withhold of the other reciprocal express, ” says Brian Thompso north, a CPA and tax lawyer. “ These agreements apply to employee compensation only. ”

note, however, that this doesn ’ triiodothyronine apply if you live in one state of matter and shape remotely for a caller headquartered in another state of matter. alternatively, you would only need to file a restitution in the state of matter in which you live and work .
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You own income-producing property in another state

Any reportable income that you earn from an out-of-state property or other generator may require that you file a tax return in that department of state. You should besides report the income on your resident return .

You’re a business owner who works in multiple states

“ If a freelance taxpayer works in multiple states, there is no effect on his federal income tax obligations, ” says Thompson. “ however, such a taxpayer may have to file tax returns and pay state income taxes in multiple states. ”
As a result, things can get complicated fast with the more states in which you do business, and you may need to enlist help from a tax professional to make certain you do everything correctly .
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Filing a nonresident state tax return

Each country has different criteria for determining your residency condition. For example, the state of Maryland considers you a resident in two ways .

  • Your permanent home is or was in Maryland.
  • Your permanent home is outside Maryland but you maintained a residence for more than six months during the year, and you were physically present in the state for at least 183 days.

For your house physician state, you ’ ll typically file the normal tax hark back for that state, if it requires one. But if you need to declare income in another state, you may need to file supernumerary forms .
For example, the state of Utah requires that nonresidents who earned Utah income for the tax year file a normal state of matter tax render with all the income earned from all sources plus an extra schedule to report which part of the income came from Utah sources. ( Though Utah makes exceptions for income entirely from a partnership, LLC, S pot or trust. )

How filing multiple state returns impacts your federal return

The inadequate answer is that it doesn ’ triiodothyronine. Your federal income tax return key is branch from your state tax returns. You report your federal hark back to the IRS and your state come back to the state ’ south entity, such as a department, commission, board or submit treasury .
While you may use some of the specific information found on your federal tax recurrence on your state returns, it likely won ’ metric ton go both ways .

State and District of Columbia taxing authorities

Bottom line

If you have reason to believe that filing taxes in more than one state is required, it ’ mho better to be safe than deplorable. Contact each state ’ randomness tax entity to check their respective requirements .
While Credit Karma Tax®, a free on-line tax-filing service, can help you with your single-state tax recurrence, it doesn ’ deoxythymidine monophosphate hold multistate filings. But you may be able to file multiple state tax returns on your own by visiting each express ’ south tax web site and filling out each state ’ randomness tax tax return. many allow you to file electronically through the express web site .
If you hit a hang-up or aren ’ deoxythymidine monophosphate certain if you ’ re doing it proper, it might be worth reaching out to a tax professional who can help you file any state returns required of you, to help you avoid potentially dearly-won mistakes along the way .
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Relevant sources: What Are Government Entities and Their Federal Tax Obligations? | Alabama Department of Revenue | Alaska Department of Revenue — Tax Division | Arizona Department of Revenue | Arkansas Department of Finance and Administration | California Part-Year Resident and Nonresident | Colorado Department of Revenue Taxation Division | Connecticut Department of Revenue Services | Delaware Division of Revenue | District of Columbia Office of Tax and Revenue | Florida Department of Revenue | Georgia Department of Revenue | Hawaii Department of Taxation | Idaho State Tax Commission | Illinois Department of Revenue | Indiana Department of Revenue | Iowa Department of Revenue | Kansas Department of Revenue | Kentucky Department of Revenue | Louisiana Department of Revenue | Maine Revenue Services | Comptroller of Maryland | Massachusetts Department of Revenue | Michigan Department of Treasury | Minnesota Department of Revenue | Mississippi Department of Revenue | Missouri Department of Revenue | Montana Department of Revenue | Nebraska Department of Revenue | Nevada Department of Taxation | New Hampshire Department of Revenue Administration | New Jersey Department of the Treasury, Division of Taxation | New Mexico Taxation & Revenue Department | New York State Department of Taxation and Finance | North Carolina Department of Revenue | North Dakota Office of State Tax Commissioner | Ohio Department of Taxation | Oklahoma Tax Commission | Oregon Department of Revenue | Pennsylvania Department of Revenue | Rhode Island Division of Taxation | South Carolina Department of Revenue | South Dakota Department of Revenue | Tennessee Department of Revenue | Texas Comptroller’s Office | Utah State Tax Commission | Vermont Department of Taxes | Virginia Department of Taxation | Washington Department of Revenue | West Virginia State Tax Department | Wisconsin Department of Revenue | Wyoming Department of Revenue
Christina Taylor is elder director of tax operations for Credit Karma Tax®. She has more than a twelve years of experience in tax, accounting and business operations. Christina founded her own account consultancy and managed it for more than six years. She co-developed an on-line DIY tax-preparation product, serving as head operating policeman for seven years. She is the current treasurer of the National Association of Computerized Tax Processors and holds a knight bachelor ’ randomness in business administration/accounting from Baker College and an MBA from Meredith College. You can find her on LinkedIn .
About the author: Ben Luthi is a personal finance freelance writer and credit cards expert. He holds a bachelor’s degree in business management and finance from Brigham Young University. In addition to Credit Karma, you can find his wo… Ben Luthi is a personal finance mercenary writer and credit cards expert. He holds a knight bachelor ’ s degree in business management and finance from Brigham Young University. In addition to Credit Karma, you can find his wo… Read more.

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