Level 2

Not clear if I was TN resident and owe Hall Tax for 2020

I have spent only 21 days in year 2020 in the state of TN before moving out. I have more than 1250 income in 

stock dividends this year. It is not clear to me if I need to file TN state return this year and if so then how will it be pro-rated? 


PS: I also have more than 1250 in interest from bank but from what I'm seeing this is NOT taxed at all.


thank you


Hall Tax Guide:

Expert Alumni

State tax filing

As a part-time TN resident, you are required to file a TN return if you are:  "...a person who moved into or out of Tennessee during the year and whose taxable interest and dividend income during the period of Tennessee residency exceeded $1,250 ($2,500 if married, filing jointly).


To see if you have to file a return,

  • Multiply the total amount of your dividends by .058 (which is 21/365).  This is the portion of the dividends while you were a TN resident. 
  • If this amount is less than $1,250, then you don't have to file a TN return.  If the amount is greater, file INC-250 with this amount reported as dividends.


The same rules apply for prorating interest.  According to the instructions for TN INC-250 the following sources of interest are taxable:


Interest from the following, if the instrument matures in more than six months from the date of issuance (except certificates of deposit):

  1. Bonds of states, counties, and municipalities outside Tennessee
  2. Bonds of foreign governments
  3. Church bonds
  4. Bonds, mortgages, deeds of trust, personal notes, promissory notes, installment notes, commercial paper, or other written instruments, issued by any person, firm, corporation, jointstock company, business, trust or partnership.

View solution in original post