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klrichards1
Level 2

Do I list VA as a "St. of Residence" on 12/31 even if I was only there on temporary assignment? I was there >183 days, but my permanent domicile is still MI. (My Info #2)

TurboTax does a poor job of being precise with "domicile" vs. "residency."  Under "My Info" Question 2: it asks to list the state(s) I lived in, but seems to assume it was a permanent move since it asks for the "Date you became a resident of VA."  Is this question really asking for every state I lived in (abode/resided), or every state I had legal domicile?  Option 1: List only Michigan since it was my only official domicile.  Then handle VA taxes separately.
Option 2: List VA as State of Residence on 12/31/2020, and MI as "previous state". Then clarify state residency status later.
8 Replies
DMarkM1
Expert Alumni

Do I list VA as a "St. of Residence" on 12/31 even if I was only there on temporary assignment? I was there >183 days, but my permanent domicile is still MI. (My Info #2)

As you alluded VA residency for tax purposes is established if you lived in VA for more than 183 days.  Which conversely means you spent less than 183 in MI; the residency requirement there as well.  However you were domiciled/resident of MI prior to the VA "residency" therefore part-year returns are correct. 

 

You should put VA as your state of residency for 31 DEC 2020 and indicate you lived in another state (MI).  The date of the move will be the first date you went to VA even though you may have gone back an forth throughout the year.

 

 

 

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klrichards1
Level 2

Do I list VA as a "St. of Residence" on 12/31 even if I was only there on temporary assignment? I was there >183 days, but my permanent domicile is still MI. (My Info #2)

@DMarkM1 I just want to confirm your recommendation still applies even though I am returning to Michigan in 2021?  I have maintained all aspects of domicile in Michigan and simply came to VA for a 12 month training (7 mos in 2020, 5 mos in 2021).

DMarkM1
Expert Alumni

Do I list VA as a "St. of Residence" on 12/31 even if I was only there on temporary assignment? I was there >183 days, but my permanent domicile is still MI. (My Info #2)

If you are permanently going back to MI and only in VA for training.  That could be considered transitory. 

 

In that case you would have MI as your residence all year.  Answer "No, you did not live in another state."  You would then indicate you earned income in VA as a non-resident at the bottom of the "My Info" section/page.   

 

 

 

 

 

 

 

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klrichards1
Level 2

Do I list VA as a "St. of Residence" on 12/31 even if I was only there on temporary assignment? I was there >183 days, but my permanent domicile is still MI. (My Info #2)

@DMarkM1 Let's keep this going! Thank you for the help so far...

The problem is that VA really tries to grab onto you.  From their Residency Status website:

"Actual Residents: Individuals who are physically present in Virginia, or who maintain a place of abode here for more than 183 days during the taxable year are actual residents. The period of residency does not have to be consecutive days. 

It is possible to be an actual resident of Virginia and a domiciliary resident of another state. For example, dual status commonly occurs when a resident of another state enrolls in a Virginia school and lives here during the school year."

"A nonresident is a person who is not a domiciliary or actual resident of Virginia, but who received income from Virginia sources during the taxable year."

For Michigan: "

  (1) "Resident" means:
  (a) An individual domiciled in the state. "Domicile" means a place where a person has his true, fixed and permanent home and principal establishment to which, whenever absent therefrom he intends to return, and domicile continues until another permanent establishment is established."
This would seem to say that we need to submit our returns as full year residents in BOTH VA and MI?  Right?
DMarkM1
Expert Alumni

Do I list VA as a "St. of Residence" on 12/31 even if I was only there on temporary assignment? I was there >183 days, but my permanent domicile is still MI. (My Info #2)

VA in this case is of course working to get its cut.  They are after the taxpayer who lives out of VA and only claims income in the other state but is actually domiciled in VA.  In your case you will file non-resident in VA to give them their cut.  You have not taken any steps to change your domicile to VA, but are earning income there and paying taxes there.    

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klrichards1
Level 2

Do I list VA as a "St. of Residence" on 12/31 even if I was only there on temporary assignment? I was there >183 days, but my permanent domicile is still MI. (My Info #2)

Last clarification @DMarkM1 ... I like your approach, but how do I avoid "Resident" status when it clearly states: "Actual Residents: Individuals who are physically present in Virginia, or who maintain a place of abode here for more than 183 days during the taxable year are actual residents"?

BillM223
Expert Alumni

Do I list VA as a "St. of Residence" on 12/31 even if I was only there on temporary assignment? I was there >183 days, but my permanent domicile is still MI. (My Info #2)

It sounds like you may have enjoyed "actual resident" status in 2020. But Virginia throws in more complexity in this case (see page 6 in the instructions:(

 

"File Form 760, Resident Return, if:

• You were an actual or domiciliary resident for the entire year; or

• You were an actual or domiciliary resident for a portion of the year, but all of your income for the entire year was from Virginia sources.

File Form 760PY, Part-Year Resident Return, if:

• You moved into Virginia during the taxable year and became either an actual or domiciliary resident; or

• You moved out of Virginia during the taxable year and became a domiciliary resident of another state, provided that you did not move back to Virginia within six months.

Note to Part-Year Residents: If you had Virginia source income during the taxable year while you were a nonresident, you may also be required to file Form 763, Nonresident Return. See Nonresidents, below"

 

It is relatively easy in the Online product to change the default of nonresident VA return to resident (it's usually the first question you get in the Online products). Your domicile of MI will cause TurboTax initially to list you as a nonresident in VA.

 

However, TurboTax does not have a way to let you file both a resident return and a part-year return for Virginia at the same time.

 

I do not know where you earned your income and when, but you might try adding the income that would have gone on the part-year return (if you need to file one) onto the resident return instead.

 

Anyway, read the quote from the instructions above and tell us which category you belong in on the basis of where you earned your income and when.

 

[Edited 5/12/2021 4:42 PM CDT, changed "PA to MI"]

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TomD8
Level 15

Do I list VA as a "St. of Residence" on 12/31 even if I was only there on temporary assignment? I was there >183 days, but my permanent domicile is still MI. (My Info #2)

I think @DMarkM1's original answer - that you should file in VA as a part-year resident - is correct.  Here's an excerpt from the actual text of the Virginia law:

 

23VAC10-110-40. Part-year residents.

A. Any individual who becomes a domiciliary or actual resident of Virginia during the taxable year or who, before the last day of the taxable year abandons his Virginia domicile, shall be taxed as a resident only for that portion of the taxable year during which he is a resident of Virginia.

B. The Virginia taxable income of a part-year resident shall be computed by determining income, deductions, subtractions, additions and modifications attributable to the period of residence in Virginia. Income attributable to Virginia is that which is received during the portion of the year in which the individual is a Virginia resident; itemized deductions attributable to Virginia are those for which payment was made during the period of residence in Virginia.

https://law.lis.virginia.gov/admincode/title23/agency10/chapter110/section40/

**Answers are correct to the best of my ability but do not constitute tax or legal advice.**

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