I have two homes, one in California and one in Maryland. I live in Maryland because that is where I work. At the end of Dec 2016, I had been in MD for 5 months (less than 183 days). However, I don't pay rent for my home in MD because it is provided by my work. I do pay rent on my California home, but I do not work there anymore. Actually, I have not worked in CA for over a year. Prior to getting the job in MD, I was traveling and working internationally. I do not plan on giving up my home in CA, but I also have no plans of leaving my job here in MD. Do I need to file two state returns and which is my official state of residence?
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Yes, you may need to file two state income tax returns. First, you need to determine which state is your resident state.
Usually your state of residency is the place you intend to be your permanent home. You’re not living in the state for a temporary purpose. It’s the place you return to after a vacation, business assignment, or away at school.
You can only have one permanent home. States often refer to this
as your domicile.
Some states have a “days test” and if you spend more than a certain number of
days (often 183 days) of the taxable year in their state, they consider you a
resident for that year.
In general, if you have a drivers license or registered to vote in a state, you are considered to be a resident.
Because you earned income in Maryland, you are required to file a MD state tax return.
If you have no California-sourced income (interest, dividends, property sales, wages, etc). you may not be required to file a CA state tax return - unless you consider California to be your permanent home. California taxes all income received by residents, although you may receive credit for taxes paid in Maryland.
Whichever state you decide is NOT your resident state, complete your non-resident state interview first. Then complete the interview for your resident state. This allows TurboTax to apply any credits for taxes paid in another state.
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