Q 1. Does it mean he had income from 3 states' sources and had to file all these 3 state tax returns, even if he lived abroad the whole year?
A 1. No.
Q 2. Does the payer's address state on these forms decide where the income should be allocated?
A 2. No.
Where the payer is does not matter, for that type of income (interest, dividends and capital gains). If he is considered a resident of a state, he reports that income on his resident state tax return, only.
