I lived/worked in NY until Aug then moved to NC & haven't worked. Wife worked a month in NY. Shen then worked a month in NC for a NC co. What's our state of residence?

[frankjfreda]

We will each have a W-2 for our NY companies (we only worked for them while we lived in NY) and she will have a W-2 for the NC company she worked for while here. She only worked a few weeks. Thank you!

[TomD8]

For tax purposes, you are both part-year residents of both NY and NC.  In the Personal Info section of TurboTax, enter your State of Residence as NC, but indicate that you lived in another state - NY - during the year.  TT will then produce the appropriate tax forms.

How do I file a part-year state return? (intuit.com)

[SteamTrain · Accepted solution]

Assuming your move to NC is more-or-less expected to continue for the immediate future...or a few years:

You are supposed to be filing part-year tax returns for both NY and NC.

On the My Info page you indicate that each of you are residents of NC, and that you moved from NY on the date in August that you entered NC.  That will trigger both the NY and NC part-year tax returns.

You need to enter every scrap of ALL your yearly income in the Federal section, all income, all deductions & credits ....all done there  before touching the two State part-year tax returns.

Then go thru each State set of forms/interview, and you will be asked to allocate what income belongs to each state.  W-2 forms are fairly easy...but things like dividends, interest , Mutual Fund distributions do need to be carefully allocated.  For example, the state return allocation page might show $100 of bank interest entered for Fed taxes...and you need to indicate what sub-part was received while you were in NY (as NY income) and the part received in NC, as NC income.  Mutual fund distributions are somewhat problematic for some, since the major distributions usually happen at year end (December)....in your case, those would end up being allocated as NC $$.

The other thing to note is that most states set their Part-Year taxes based on your Full-Year income, but then proportion it down based on the fraction that was earned/received while in that state. I know NC does that.  Thus, NC will calculate a tax on ALL your year's income, but based on your allocations, if 10% was received while in NC, then it takes 10% of the calculated full-year tax as what you are liable for in NC.

[frankjfreda]

Thank you very much @TomD8 for your answer!

[frankjfreda]

Thank you very much @SteamTrain for the super thorough information!