Living in multiple states

[schisolm]

I have homes in both NJ & DE. My PA job has my NJ address, and has allocated my income to NJ without any state withholding. However, I received a 401K distribution, which was taxed by DE because they have my DE address. I mostly stayed at my home in NJ, but my license uses my DE address. Should I file as a full-year resident in both NJ & DE?

[HopeS]

You will file in the State where you consider your primary home as a Resident of that State. Your second home would not be considered a primary home and a full-year resident.

If you are earning money in other states you may need to file a Non-Resident State return. 

Here are some examples of what counts as making money in another state:

• Living in one state and working in another
• Owning or inheriting a business, farm, or rental property
• Selling a home
• Gambling winnings

You should complete the non resident return before you complete you resident state . If you just worked in the other states you will pay taxes in those states and get a credit for taxes paid in your home state. You should do the non-residential states first and your residential state last. This is to ensure you get the credits derived from the non-residential states to flow properly.

Check to see if any of the states have reciprocity with your home state.  If you do have states with reciprocity check to see if that state withheld on your W2. If the state withheld and they do have reciprocity with your home state you will need to file a return to reclaim the amount withheld. If they did not withhold then you are good to go. 

@schisolm 

[schisolm]

Thank you for your answer, but I feel like this is a general answer to living in multiple states and isn't specific to my situation. My question is do I file as a full-year resident in both NJ and DE? I ask this because my license uses my DE address and my retirement distribution was taxed in DE, but I've been staying at my NJ residence where my job has allocated my income to but have not withheld any state tax because they're located in PA.

[TeresaM · Accepted solution]

You can only be a resident of one state at one time. So you could file Part-Year Resident forms for both Delaware and New Jersey, or you can file one as a Resident and one as a Non-Resident. The wages on your Form W-2 will be taxed where the work is performed, so that sounds like New Jersey but it could be on a Non-Resident or a Resident form. 

Residency of a state also takes into account intention. If you kept your Delaware driver's license and were still registered to vote there but were temporarily in New Jersey while you worked, you might make a case that you were a resident of Delaware all year and a non-resident working in temporarily in New Jersey.

If you moved with the intention of taking up residence in New Jersey, changed your license, voted there, and changed all your mailing addresses to New Jersey, a case could be made that you did become a resident of New Jersey, and you could file a part year resident return for both states.