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aemccue1
Returning Member

Part year resident state taxes, how to allocate rental income from a property in one state

We are filing part year resident returns for both MO and IL (2 months in MO, 10 in IL). We have rental income from a property in MO that we have been renting out since we moved. MO state taxes say to allocate to MO all income "from Missouri sources," so we allocated all of our rental income to MO on that form. However, Illinois state taxes say to allocate income "based on the length of your residency or the source of the income" and to "enter the amount that applies to the time you were an Illinois resident or to your activities in Illinois."

I can't tell from this language if the rental income earned in MO from MO sources should then not be allocated to IL here since the source of the income was not in IL or if it should since we were IL residents at that time.

This is not a non-resident tax return, where I understand we would claim the income on both returns and should get a credit from one of the states. This is a part year resident return, and I can't quite find an answer to this question in the community.

Thanks!

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3 Replies
MarilynG
Expert Alumni

Part year resident state taxes, how to allocate rental income from a property in one state

Yes, you would report all of your Missouri Rental Income on your Part-Year Resident return for 2018.  

For 2019, if you are an Illinois Resident, you will still need to file a Non-Resident Return to Missouri.

Here's more info:

https://ttlc.intuit.com/replies/6114597

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aemccue1
Returning Member

Part year resident state taxes, how to allocate rental income from a property in one state

Do you mean we would claim it all on the MO part year return or all on the IL part year return or all on both? The resource you linked to talked about filing non resident forms not part year resident forms. Turbo tax has rental income listed as unearned I come and says it should be split based on the days we lived in each state. But I’m confused because Missouri wants me to enter all income front MO sources.
MarilynG
Expert Alumni

Part year resident state taxes, how to allocate rental income from a property in one state

Yes, the rental income from Missouri always goes on a Missouri return; whether Part Year or Non Resident.  It's an exception to allocating other types of Unearned Income... as the property is located there.
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