Multi-state Return Question with Retired Spouse

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My residence with husband is in Minnesota. As of mid-2023, I am now considered an employee of Missouri. In mid-2023, HR started taking state taxes for Minnesota and Missouri. I physically worked in Missouri for three days since the conversion to a Missouri employee as I work remotely. My husband is retired, and only has income from joint investments. I will complete the Missouri non-resident form to file with my taxes and will file a joint Federal return for all income. How is joint investment income determined when I file the married filing separately state taxes? I suspect I will only file a married filing separately Missouri tax return as my husband does not have Missouri earned income. Is that correct? Will my husband and I file separately for the Minnesota return, splitting out the investment income? I will use Turbo Tax and purchase a second state return. Thanks for any responses.

TomD8

Alumni - Champ

Missouri can tax only the income you earned on the three days you physically worked in Missouri. The income you earned by working remotely in Minnesota is MN-source income, not MO-source income. Work income is "sourced" where the work is actually (physically) performed. MO taxes non-residents only on MO-source income. The employer's location does not determine sourcing.

This MO tax website explains the rules on whether or not you're required to file a MO tax return:

https://dor.mo.gov/taxation/individual/additional-resources/non-residents.html

Note that MO requires you to use the same filing status on your MO return (if you're required to file) that you used on your federal return.

ALL you & your husband's income is taxable by your home state of MN, regardless of where you earned it. It is almost always advantageous for married couples to file jointly.

**Answers are correct to the best of my ability but do not constitute tax or legal advice.