topic Got it. Thanks a lot! in State tax filing

If someone is a full-year resident of VT (lived there over 183 days of 2018), can they deduct wages made while residing in Michigan (before moving) on their VT return?

mflees — Sat, 01 Jun 2019 15:23:46 GMT

It depends. Based on the information you provide in your...

DanielV01 — Sat, 01 Jun 2019 15:23:48 GMT

It depends. Based on the information you provide in your question, it sounds like you should be filing part-year resident returns for both Michigan and Vermont.

Vermont, and a number of other states, have a similar criteria for determining a statutory resident. A statutory resident is someone who maintains a domicile in the state (even though it is not the main place in which they live), and is physically present in the state, typically for 183 days. However, when someone moves into the state to become a "domiciliary resident" (where your main home is located), they file as a part-year resident even though the period of residency in the state is more than 183 days.

Your question seems to indicate that this is the case with you. If you did move into Vermont (and did not previously have a domicile there prior to your move), you file part-year resident returns for each state, and Michigan will tax the Michigan income while Vermont will tax the Vermont income.

However, if you were a full-year Vermont resident, you would need to file a Michigan nonresident return and a Vermont resident return. In this circumstance your income is not excluded from Vermont. However, Vermont would provide you with a credit for the tax you pay to Michigan for the income you earn there. You would want to prepare the Michigan return first so that the credit for the taxes paid can be transferred over to your Vermont return.

Hi Daniel. Thanks a lot for your response and for clarify...

mflees — Sat, 01 Jun 2019 15:23:50 GMT

Hi Daniel. Thanks a lot for your response and for clarifying that distinction. It's a bit complicated. I resided in Michigan for the entire year. My wife lived in Michigan for a few months, then moved to Vermont. We have lived in separate states for April through the end of 2018. Would that still lead you to believe she is a domiciliary resident?

We are filing jointly on federal, jointly on Michigan (it was pretty straightforward splitting income between states) and are now looking at Vermont. If my wife is a full-year resident of Vermont, it was looking like we were to file separately in Vermont (recomputing our federal 1040 for Vermont purposes), but I didn't see any option to deduct my wife's Michigan wages (made prior to her move to Vermont in April). I did see a reference to IN-112 Calculation B, but I cannot find any such form and form IN-112 does not appear to offer any deduction for out-of-state wages.

Just a little extra info if that makes a difference. Really appreciate your help!

Looking at the Vermont statutes, she is able to file as m...

DanielV01 — Sat, 01 Jun 2019 15:23:52 GMT

Looking at the Vermont statutes, she is able to file as married filing separately and as a part-year resident. That is the option I would recommend.

Got it. Thanks a lot!

mflees — Sat, 01 Jun 2019 15:23:55 GMT

Got it. Thanks a lot!

You're welcome.

DanielV01 — Sat, 01 Jun 2019 15:23:55 GMT

You're welcome.