moving from Sales Tax state to Income Tax state

[haybaker]

I moved from Washington to Idaho the first of August 2020, still working for the same company located in WA. With only 5 months of ID income tax withheld, TurboTax is telling me I now owe $1400 to ID. Isn't there an exemption to ID Income Tax when living / earning part of the year in another state? I did enter that I lived in another state, but this did not reflect any change to money owed ID.

[TomD8]

On your part-year resident Idaho return, be sure to allocate to ID only the income you earned after becoming an ID resident.

You became a resident of ID for tax purposes when you began living in your new home in Idaho.

[MaryK4 · Accepted solution]

 If you were a Part-Year resident of Idaho, you pay taxes on all the income you receive while living in Idaho plus any income you receive from Idaho sources when not living in Idaho.. 

In TurboTax, you can allocate your income based on where you earned it.  

Make sure you are filing a Form 43 for Idaho and check the Idaho source income.  

[haybaker]

Great news.  And when you say allocate only the income while an Idaho resident, do you mean that I simply don't report on the Idaho return, the amount earned while a Washington resident.  Just calculate how much was earned while living here in Idaho?

[MaryK4 · Accepted solution]

Yes, that is correct for the Idaho Form 43 you only have to include the income while you worked in Idaho.

Compensation is income from wages and salary and other amounts your employer pays you for the services you perform. Compensation for services performed in Idaho is Idaho source income.

• Work both in and outside Idaho during the year: You or your employer must compute an Idaho compensation percentage. You can then calculate your Idaho compensation from that job.

To compute your Idaho compensation, divide Idaho work days by total work days

• Work days include only those days you provided personal services for your employer. Don't include any days off when you didn't provide personal services for your employer (e.g., holidays, vacation).
• Idaho work days are the total days you worked in Idaho for a particular employer during the year.
• Total work days are the total days you worked for that employer both in and outside Idaho during the year.

Idaho Source Income - Idaho State Tax Commission

@haybaker

[TomD8 · Accepted solution]

Correct.  The income you earned while living and working in Washington is not taxable by Idaho.   But the income you earned after becoming an Idaho resident is entirely taxable by Idaho.