Alabama residency

Forum|Forum|6 years ago
February 16, 2020
3 replies
42 views

I own a home in Alabama (2018, 19 and still 20). I began working in MD in 2019 and bought a home there as well, in Feb. 2019. Although working in MD, i was being taxed by Alabama, till i advised my employer (Federal Govt') to change it from Alabama to MD (June-ish time frame). I changed my DL to MD in August and then fully embraced my marylander status: voter registration changed, etc..

MD tax booklet clearly states that even if you have a domicile in another state, that if you worked and lived in MD for at least 183days, if you had an abode in MD (which I did), you must claim full year residency. (unless I’m reading the 2019 MD 502 1.b. incorrectly).

Alabama's tax booklet is not as clear. it speaks of moving INTO alabama, and working IN alabama, but i dont know about "working in another state, having a domicile in alabama for part of that time and paying AL taxes, but then committing to the other state part way through.

Do i do a Alabama 40 (part year?) or 40NR, non-resident?

Alabama's 40NR seems to address LIVING out of state, but working IN state, and receiving income from within the state and thus being taxed by the state; which isnt my situation.

I LIVED out of state, WORKED out of state, but paid AL taxes for some of the year (prob 5-6mths?).

I'm thinking i should do AL 40 part year, but I’m unclear if i can legally claim MD as full year resident -because they require me do so based on their 183day rule- while simultaneously claim part-year for AL – since I DID pay “part year Alabama taxes.

Will i be "penalized" from MD for not paying taxes to them ALL year, despite THEM making me claim full year residency? Will i get credit for having paid taxes to another state?

Will Alabama credit me for paying AL taxes, despite me living elsewhere?, and what type resident does Alabama deem me to be?

Turbo tax assumed Part-year for both states since my address changed from the last time i did TTax, so its automatically doing the part-year for both. But per MD 502 1.b, MD wants me to do “full year residency”.

Once I began clicking through, TTax wont let me re-adjust my “2 state option” – so I stopped

please help/advise

MaryK4

Level 15

You will have to claim Maryland Resident Full Year because of the 183 days rule- for this purpose you were a Part Year Resident of Maryland and then a Part-Year Tax Resident- so you can claim the credit for tax paid to another state in Alabama for the time you were the Part-Year Maryland Tax Resident.

You will probably owe Maryland tax this year for the delay in state withholding change, but you should also have an almost full refund of tax from Alabama (because of the aforementioned credit). You may have to complete the Maryland request for waiver for underpayment of estimated tax- because you did not file last year you qualify.

If you need further assistance, please post questions again.

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userredlocs_99Author

Level 2

Thanks Mark so i will do the MD Full Year resident option and figure out how to do the credit for alabama while doing the MD .

Q1: But do i have to do an Alabama return at all? if so, which one? 40 part year? after all, i didnt earn taxes IN alabama, but they did tax me.

Q2: Turbo Tax doesnt seem to allow me to remove both states - since i had alabama as my state when i did taxes last year, and now MD, it automatically listed both states for me to do "part year for both". how do i edit TTax?

i'm willing to pay the $39 for an additional state, but want to be sure TTAX is calculating as "fulll year resident" when they do the MD portion.

MaryK4

Level 15

You will want to file for Alabama to get the taxes you paid to them withheld. If you changed the residency to Maryland, you could file as a nonresident. You can change the residency for both states in the TurboTax state entry sections. It asks you to verify residency status at the start of each interview.

@userredlocs_99

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