Filing tax for rental property income

[chirpy]

I'm resident of Virginia and filing taxes in Virginia. However I've rental income from West Virginia one property results in positive and other property results in negative income. Do I need to file state tax in West Virginia?

[DawnC · Accepted solution]

Yes, you’ll need to file a nonresident state return if you made money from sources in a state you don’t live in.   Some examples are:

• Wages or income you earned while working in that state
• Out-of-state rental income, gambling winnings, or profits from property sales
• S Corporation or partnership income
• Beneficiary income from a trust or estate
• For active duty military: non-military income earned outside your state of legal residence
• If your employer withheld taxes for the wrong state

Every state has its own rules regarding nonresident returns. Check your state's Department of Revenue website for specific details.   Nonresidents of WV with source income in WV will file IT-140.  

How to File a Nonresident Return?    This link tells you how to get TurboTax to generate the nonresident return - you will want to add WV in the Other State Income box.

West Virginia Personal Income Tax -  Prepare your nonresident return before you prepare the resident VA return.  

[chirpy]

Thank you for you response. Virginia  has reciprocity tax adjustment with WV. Do we still need to file state tax in WV?

[CatinaT1]

Yes. You still had WV source income from the rental, and the reciprocity does not change your filing requirement. As Dawnc states above, you will need to file a Nonresident Return for WV.

 The West Virginia source income of a nonresident is derived from the following sources included in your federal adjusted gross income: 

• Real or tangible personal property located in West Virginia;

[chirpy]

Thank you for the reply. Sorry I missed to state that though I have rental property net income is losses. Still I need to file WV taxes even though net income is losses?

Thank you

[AmyC]

Some states require you to file based on the rental income.  

WV instructions, page 18 states you must file if:

• You were not a resident of West Virginia at any time during 2022, but your federal adjusted gross income includes income from West Virginia sources (nonresident).
• Your West Virginia adjusted gross income is greater than your allowable deduction for personal exemptions ($2,000 per exemption)

Since you have a loss from WV in your federal income, I would argue the WV is not needed. In addition,  your WV income is below the exemption amount.