If a bonus is received after retirement and I have moved to a new state, do I pay taxes to the state where the money was earned or where it is received?

[sgs112]

I will be receiving bonuses for company performance for 3 years beyond my retirement.  If I move to a new state that does not collect taxes once I retire, will I still have to file a state return in my previous state and pay taxes where the business is located and where the money was earned ?

[DaveF1006]

No, you will not report these earning to the former state because you are no longer living there. The only reason why you may need to file is if your former employer reported your income to your former state and if taxes were withheld.

[sgs112]

Do you know the tax code publication number that explains how this is handled?  The employer is claiming they must report the income in the state it was earned.  Are incentive payments handled differently than bonus payments?

[ToddL99 · Accepted solution]

Your employer is correct - you "earned" these bonuses while working in your former state of residence, even though they are being paid out after you moved to another state.

Whether and how the payments might be taxed by your former state of residence depends on the amount of the payments and your former state's tax laws.

"Incentive" payments and "bonus" payments would be treated the same for tax purposes - both are based on job performance.