I moved from CA to OR in February 2021 -- Do a file as part-time resident in each state for 2021 tax year?

[Gimel]

Thanks for this forum! Here's my question:

We moved from California to Oregon in late February for my spouse's job, selling our house in California and buying a home in Oregon that same month. I think I have finally figured out how to use my TurboTax state software to get credit in Oregon for taxes we've already paid to California in connection with our house sale.

But the rules differ slightly based on whether you are a part-time resident or full-time resident in one of those states.

Since we moved and changed residences 50-something days into the year, TurboTax is guiding us to file as part-time residents. But I contacted the Oregon Dept of Revenue to get some clarity on the tax credit for California taxes paid and was instructed to look at the Oregon Income Tax guide to determine our residency. There is some language that refers to non-domiciled residents being someone who owns a home and spends at least 200 days in Oregon. But that sounds like it could mean somebody who owns a home but lives out of state part of the year.

So can any expert out there advise: Are we part-time residents in both states in 2021? Seems like a situation other California transplants out there have probably experienced.

Thanks again for taking the time to answer

[MaryK4]

Yes, you are a Part-Year resident of California and Oregon- the distinction is that you did sever ties with California and do not intend to go back.  A Part-Year resident reports all the income for the time they were a resident and state source income for the time they are a nonresident.  (like in your case, the California home sale)

[Gimel]

Thanks so much, Mary. Am I correct, then, in that I can claim a credit in Oregon for the taxes paid to California for the house sale -- under this provision: Mutually-taxed gain on the sale of residential property (ORS 316.109)

thanks again

[ErnieS0]

Your original post is somewhat unclear about the timing. If you became an Oregon resident before you sold your home in California, then yes, you can claim a credit for tax paid to California on the home sale.

The sale of CA property is taxable to a nonresident so it is included in both your CA and OR tax returns.

California follows IRS rules that allow married couples to exclude up to $500,000 of gain from the sale of a home owned and lived in for two of five years. 

Sale of your principle residence