splitting income between domicile state and second home in anther state

Forum|Forum|5 years ago
March 4, 2021
2 replies
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Massachusetts is my domicile. In 2020 I spent 7 months in North Carolina because of Covid. How do I allocate Social Security and investment income? I'm retired and have no earned income. Also I rent my house in North Carolina and have net taxable income of $2,038 for 2020. Does it get split or allocated to North Carolina?

Best answer by DavidD66

Since you are a resident of Massachusetts, 100% of your income is taxable by Massachusetts. Visiting your second home in North Carolina does not make your Social Security benefits you received while there taxable by NC. 100% of your North Carolina sourced income (which would include your rental property) is taxable by North Carolina. and should be reported on your NC non-resident tax return. Your rental income is also taxable by Massachusetts, but they will give you a credit for taxes paid to other states so that you won't be subject to double taxation. Although if your only NC income is $2,038 then you probably won't owe any NC tax. Because you have a rental property in NC, you should file a NC non-resident return every year.

When you prepare your state tax returns, you should prepare your non-resident North Carolina return first.