How would you handle this scenario for allocating two states with part-time residency?
Employed in Oklahoma through all of Jan-March by Oklahoma based daughter company (first W2 with OK Withholdings).
Accepted offer to work for NY based parent company end of March, and remained in OK until 6/18 (second W2 with all NY withholdings).
Moved into NY apartment 6/22.
Surrendered OK license and Received new driver license and vehicle registration 9/28.
First W2: Jan - March
Second W2: April - Dec
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TurboTax handles part-year returns, but you need to make sure you've set up your personal information correctly for us to do so. We'll ask about where you lived in 2020 when you set up your personal information. See link at the bottom for full instructions.
Allocating earned income is easy if you stopped working for an employer in one state and started working elsewhere after you moved. All you need to do is look at your W-2 or 1099-MISC. Allocate the income from your former job to your former state and your income from the new job to your new state.
What if you continue working at the same job while living in 2 different states? Some companies will send you a W-2 with the state totals listed, others will send you two separate W-2’s for each state. If not or they didn't change the withholding to the second state, then you’ll have to estimate how much income you earned as a resident of one state versus the other. Here's a few ways to do that:
Method 1: This is the simplest method of all and the most accurate if your income fluctuates from paycheck to paycheck.
Find a pay stub with the pay period ending around the time of your move. The YTD (year-to-date) amount on the pay stub is how much you earned while residing in your former state.
Method 2: This method is pretty accurate as long as your income is more or less the same from paycheck to paycheck.
Estimate the number of weeks/months you worked at that job while a resident of one state and divide it by the total of number of weeks/months you worked at that job to come up with a factor. Apply the factor to your total income from that job to come up with the allocation for that state.
For example, if you worked at that same job the entire year and moved in early May, you earned roughly 4 months' worth of income (1/3 or 33% of your total income) in your old state. Multiply the total income from that job by .33 to obtain the allocation for your former state. The remainder gets allocated to your new state.
Method 3: This method is the most accurate, but it also assumes your income is more or less the same from paycheck to paycheck.
First, find the Julian date of your move (also called an ordinal date). Search for Julian calendar in your favorite search engine.
Then divide your Julian date by 365 to come up with a factor, which should be less than 1. Apply your factor to the year's total income from that job to get the income allocation for your former state. The remainder is allocated to your new state.
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