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.
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):
- Bonds of states, counties, and municipalities outside Tennessee
- Bonds of foreign governments
- Church bonds
- 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.