Live in one state; earn income, shop, eat, and maintain residency in another.

[FourFifteen]

Short story, dream house became available and am buying despite being across the border. What am I to do from a state tax standpoint?

I currently live and work in Minnesota. Am buying a home across the border in Wisconsin. I plan to spend most of my not at home time in Minnesota. I will continue to work and earn income in Minnesota. 80% of my retail shopping will still be in Minnesota. Will still be member of organizations in Minnesota and spend my free time there. Based off what I have read on Minnesota .gov sites I will be able to maintain residency in Minnesota.

What does this all mean for me owning a home in Wisconsin that I live at? As far as Wisconsin goes, I will just be spending income earned in another state and owning property (paying taxes on) in the state. 

I feel confused about what I will need to do for state taxes. Any insights would be appreciated.

Thank you.

[rjs]

If you live in Wisconsin, you will be a Wisconsin resident.

See the following fact sheet for the definition of a Minnesota resident for income tax purposes.

Minnesota Income Tax Fact Sheet 1, Residency

Although it is possible to be considered a resident of two states, you don't really want to maintain your Minnesota residency. If you did that, you would have to pay tax to both states on all of your income. You can have only one domicile. If your home is in Wisconsin and you live there, Wisconsin will be your domicile. I assume you will sell your home in Minnesota. If so, you will no longer meet the definition of a Minnesota resident.

Where you shop is not one of the factors that is considered in determining your residency.

The income that you earn from working in Minnesota is subject to Minnesota tax, no matter where you live. All of your income is subject to tax by the state you live in, no matter where the income is from. If you are a Wisconsin resident and a Minnesota nonresident, you will file a Wisconsin resident tax return and a Minnesota nonresident tax return. You will get a credit on your Wisconsin resident tax return for part or all of the tax that you pay to Minnesota, so that the income is not double taxed.

[FourFifteen]

Wow thank you Champ!

I did read the Income Tax Fact Sheet 1 and concluded that the 183 day rule allowed me to possibly maintain MN residency or MN to be my Domicile since I will meet many factors for the 183 day rule. I also own a rental  townhome in MN and the property I am moving out of in MN will become a rental.  

Yes I am trying to keep my suburban life in MN in case rural life in WI may not work out . I may even keep a PO box in MN, lol.

All this said, it sounds like for tax purposes I should be a WI resident that earns income in MN resulting in filling a State Return for each. While more paperwork, it reads like I will not be double-taxed on the incomes.

[Critter-3]

In the TT program you must complete the MN return first so the proper credit can be computed on the WI return.