You will file a nonresident California return and report the earnings made in California while you temporarily lived there as a student. You will also file an Alabama part-year resident return, which will show you as a resident through the date you moved to Texas. The income earned in California will be taxed on your resident return, but you will also get a credit on your Alabama return for tax paid to California.
Texas has no state income tax and there is no state tax return to file.
Regarding your dividend and interest income, the total should be prorated based on the number of months you were considered an Alabama resident. You will be liable for Alabama income tax on the amount you allocate.
The first thing you want to do is make sure you've filled out the Personal Info section correctly:
- With your return open, select My Info in the left-hand menu.
- Then, on the Personal info summary screen, please make sure your resident state (as of December 31, 2020) listed under your name is correct.
- Then, scroll down to Other State Income, and select Edit.
- At the Did you make money in any other states? question, answer Yes and make sure your other part-year state (AL) is selected from the drop-down.
- Select Continue to return to your Personal info summary.
- Click on State on the left hand side.
- You should see an Alabama return on the summary page.
- Click on Add a state as a non-resident of California.
- Follow the on-screen instructions.
It is recommended that you complete the non-resident return first (CA) to ensure accurate calculations.
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