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omaarp100
New Member

Is all income earned in a tax free state taxable if I move to a state that taxes income ?

 
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Accepted Solutions
Hal_Al
Level 15

Is all income earned in a tax free state taxable if I move to a state that taxes income ?

You report all your income, received while a resident,  on your resident state return, including the income earned in another state. Your home state calculates tax on all your income, but gives you a credit, or partial credit, for tax you paid to the other state.

When you worked in a state without an income tax, there will be no credit, since there was no  tax. In other words, having worked in a state without an income tax does not get you out of paying state tax on that income, to your home state

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2 Replies
rjs
Level 15
Level 15

Is all income earned in a tax free state taxable if I move to a state that taxes income ?

Any income that you earn while you are living in a state that has income tax will be taxed by that state, no matter where the income is from. But income that you earned while you lived and worked in a state with no income tax, before you moved, does not become taxable by the state that you move to after you earned the income.

 

If you worked in a state that has income tax while you were living in a state with no income tax, the income is taxable by the state that you worked in, even though you lived in a state with no income tax.

 

Hal_Al
Level 15

Is all income earned in a tax free state taxable if I move to a state that taxes income ?

You report all your income, received while a resident,  on your resident state return, including the income earned in another state. Your home state calculates tax on all your income, but gives you a credit, or partial credit, for tax you paid to the other state.

When you worked in a state without an income tax, there will be no credit, since there was no  tax. In other words, having worked in a state without an income tax does not get you out of paying state tax on that income, to your home state

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