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Filing taxes in multiple states is fairly common these days! People are mobile  - they’re making the big move to their dream location, taking temporary out-of-state jobs, purchasing a short-term rental/vacation home in another state, and traveling for their business. Whatever the reason, filing taxes for more than one state doesn’t have to be scary - it’s actually simpler than most people realize. Not only does TurboTax make it easy, but the scenarios below are going to make it clear for your unique multi-state tax situation. You’ll be confident and ready to go at tax time!  DO YOU REALLY HAVE TO FILE IN BOTH STATES? Maybe - maybe not. Each state has its own filing requirements ranging from states with none at all (because they don’t even have income tax), to those that require filing simply because you’re filing a federal tax return, even if you don’t have enough income to have a tax liability.  To find out if you even need to file in a particular state, it’s best to go to the state resource. This list is pretty comprehensive with ALL states and the links to their webpages - and who must file in their state!  And as of this writing, there are nine states in the U.S. that have no state income tax: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington and Wyoming.  PRO TIP - If you do have to file in more than one state, most states offer to ease the tax burden a bit by allowing a tax credit for taxes paid to the other state - assuming the same income is being taxed in both states.  ARE YOU A RESIDENT, PART-YEAR RESIDENT, OR NONRESIDENT OF THE STATE? It’s more than just your intentions or making the choice - there are rules (of course) to determine whether you’re a resident of a state or not. While many states’ residency rules are similar, some are vastly different. And military members have their own set of rules - so check out the resources below if that applies to you. To help you out a bit more, this article on Multiple States - Where To File explains the difference between resident vs. nonresident state taxes, and includes some insight into military moves too. DID YOU MOVE? This is the simplest scenario. You’ll file a part-year tax return for each state. Let’s start with W-2 income - if you’re an employee with a new job, you had to fill out a new W-4 federal withholding form. You also should have filled out the equivalent tax withholding form for the state. That takes care of it and each W-2 reflects income from the two employers and already separates it by state. If you moved with the same employer, ideally, you filled out a new state withholding form on the first day in the new state. If that’s the case, it’s already separated out for you on your W-2 form. Yay!  But sometimes the tax withholding doesn’t quite happen like it should and there may be some overlap where income is taxed by the wrong state. In that case, you’ll need to figure it out and adjust your state tax returns to allocate the appropriate income to each state. Again, it should be simple to figure it out because you know the date you moved and you know what’s on your paychecks. Whatever your paychecks were pre-move are in the former state, and post move is all the new state. Just make sure to grab the right numbers for the taxable income, not the gross amount before your pre-tax deductions (like health insurance or retirement plan contributions). If you’re self-employed - that’s easy too - since all of your revenue and expenses are listed by date in your books. You’ll just run a report (generally a P&L - Profit and Loss) in your bookkeeping software with the cut-off date of the move, and you’re set!  DID YOU LIVE IN ONE STATE, BUT WORK IN A DIFFERENT ONE? The only tricky part here is if the states have reciprocity. Reciprocity simply means the two states have an agreement for this situation so you can request an exemption from state tax withholding in the nonresident state and you won’t have to file tax returns for that state - which makes your tax filing (you guessed it) simpler! And to help you further, another great resource list and this one’s about which states have reciprocal agreements.   If there is no reciprocal agreement between the two states, you’ll file a nonresident return in the state you earned the money, and a resident return in the state in which you reside. DID YOU TRAVEL FOR WORK OR EARN INCOME FROM OTHER STATES? Okay - this is the trickiest scenario, but not really! Let’s start by saying your “resident” state will tax income from all sources. Other states want their fair share of tax dollars if your bank account benefitted from their state’s citizens or businesses. You’ll see terms such as “source income” or “income derived from” referring to, quite simply, where the income was earned.  Most states keep it simple - you worked there, you probably owe taxes there. Another common scenario is owning a rental property in another state. Allocating that income to that nonresident state is simple since you’ll typically file a Schedule E for that income, and it’s all right there for you. If you own a business in another state, the same situation applies - you’ll have a Schedule C or Schedule K-1 from that income source, so allocating to the nonresident state is easy peasy! And we can’t continue without a link to another great article that includes two methods to apportion your income between states: Multiple States—Figuring What's Owed When You Live and Work in More Than One State.  This is especially helpful if you’re self-employed and regularly travel for business. While your P&L should have the breakdown for each income source, for some annual expenses that apply to all of your income, you might need to do a little math to allocate the cost to each state. If you still have concerns about getting it right, no worries! TurboTax will be there to guide you every step of the way!   Are you a member of our incredible military? These resources are just for you! What is my military state of residence?  Where can I find state information on filing my return as an active duty military member? Military Tax Return Filing and Extensions - Active duty, combat zones, travel, moving expenses, extensions & more! Military Personnel Tax Tips - Quick look at a couple of tax deductions - plus links with more info at the end of the article.