turbotax icon
cancel
Showing results for 
Search instead for 
Did you mean: 
Announcements
Close icon
Do you have a TurboTax Online account?

We'll help you get started or pick up where you left off.

If we were not technically residents of a state when we took a retirement withdrawal can we avoid paying the state tax on it in that state?

We had a mailing address in the state, but were not residents because we did not have a physical address, but the state is still taxing our withdrawals.
x
Do you have an Intuit account?

Do you have an Intuit account?

You'll need to sign in or create an account to connect with an expert.

2 Replies
TomK2023
Employee Tax Expert

If we were not technically residents of a state when we took a retirement withdrawal can we avoid paying the state tax on it in that state?

It depends.  Which state are you talking about?  Each state has specific residency requirements.  

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"

If we were not technically residents of a state when we took a retirement withdrawal can we avoid paying the state tax on it in that state?

You need to look up the concept of domicile.  Your domicile is your permanent home, and you can only have one domicile at a time.  There is no single factor that determine your domicile, it is a combination of things including where you live, work, have significant family and social ties, your doctor and dentist, where your car is registered, where you vote, and so on.  Also, leaving a domicile requires active steps to abandon the domicile and establish a new domicile, with no reasonable likelihood that you will return to the old domicile.  It is possible to live far away from your domicile for a long time without actually changing your domicile.  

 

You will have to look up the rules for residency and domicile in that state and consider your own facts and circumstances.  You might still be domiciled there even if you temporarily don't live there.   Or, if you can show you abandoned your domicile and have a new domicile somewhere else, then you are not a resident of that state (depending on when you changed domiciles).  You might file a part-year resident or non-resident tax return and claim a refund of any tax that was withheld.

Unlock tailored help options in your account.

message box icon

Get more help

Ask questions and learn more about your taxes and finances.

Post your Question