Yes, your understanding is correct. Since the incentive that generated the interest (Form 1099INT) was earned in TN, you should allocate this amount to TN.
Below are examples of how to allocate unearned income:
Allocating unearned income is pretty straightforward: just allocate it to the state you were a resident of when you received it.
- You received three quarterly dividend payments while living in Arkansas, and the remaining dividend while living in Oklahoma. Allocate the first three payments to Arkansas and the last payment to Oklahoma
- You sold some stocks right after you moved to Iowa. Allocate the gain to Iowa.
- You closed an interest-bearing account while still living in California, so you'd allocate 100% of the interest to California
- On the other hand, if the account remains open, you'd allocate the interest you earned as a California resident to California, and the remainder to your new state. An easy allocation method is to divide the year's interest by 12, and then multiply the figure by the number of months you lived in each state
Click below for more information:
Unearned Income Allocation
@gelbermj
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