In the case where you are filing part-year returns for two
different states due to a move during the year, certain income and deduction items must be allocated between the two states. Sometimes this allocation is obvious, other
times it is not.
When doing your allocations, you can choose any of the
following methods:
- Go by the income
you earned while you lived in the state
- Go by the time
you spent in the state
- Go by an
association with the state
For items such as capital gains distribution and
bank account interest where it is not obvious when the income was earned or it
was spread out throughout the year, allocating it by the time spent in each
state is probably the best method to use.
In your
case, 7/12 of the amount would be allocated to NY, with the remaining 5/12 of
the amount allocated to Iowa.
