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Level 2
June 1, 2019
Question

In which state should severance be taxed if I moved to another state (from MD to CO) while receiving the severance income?

  • June 1, 2019
  • 3 replies
  • 3 views
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3 replies

Alumni - Champ
June 1, 2019
Was the severance paid in a lump sum, or in multiple payments over time?
Level 2
February 18, 2025

Multiple payments over 5 or 6 months.

Level 15
February 18, 2025

Rules vary by state, but in general you report the income on a tax return for the state in which it was earned, even if you are living in another state when you received it.

 

@cermakdonap57 

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MJA23Author
Level 2
June 1, 2019
Multiple payments over several months.
Alumni - Champ
June 1, 2019

You claim what you received while in MD on MD taxes, and what you received while in CO on CO's taxes.

MJA23Author
Level 2
June 1, 2019
That's what I thought, but the MD company is saying that because I didn't perform any work for them while living in CO, the severance is taxed in the state where I "earned" the money (MD).
Level 2
March 14, 2024

Do you remember how you ended up solving this? I.e. where did you pay state taxes?