Two-state return - apportioning income

Steerpike58 — Tue, 28 Mar 2023 22:39:58 GMT

I moved from AZ to CA in March, 2023, so I'm filing a two-state return. I had no 'earned' income in 2023; all my income was either traditional IRA withdrawals or interest/dividends/cap gains. The very first question TT asks me when filling in my AZ return is, what is the AZ amount of the total Interest and also Dividend income. The interest and dividend income is somewhat random throughout the year. My two thoughts are - to apportion the various income amounts according to days of residency (roughly, 25% AZ, 75% CA) or, to assign all the income to CA since the majority of the dividend and cap gains 'events' occurred while living there. Note, the IRA withdrawal was a single one-time lump sum, mid-year (as opposed to a recurring monthly withdrawal, or whatever).

Are there any strict rules on this? The amounts are not significant enough to make a huge difference based on the different tax rates of the two states; I just want to file the taxes and be done.

Re: Two-state return - apportioning income

MarilynG1 — Tue, 28 Mar 2023 22:59:43 GMT

No, the rules for allocating unearned income are mostly logical. If you received a distribution while living in one state, you could report it there, for example.

Apportioning totals according to % of Residency is also acceptable. As long as you have a reasonable method (and keep record of it).

Here's more examples for Allocating Unearned Income for a Part-Year Resident.

@Steerpike58

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Two-state return - apportioning income

Re: Two-state return - apportioning income