Multiple states

For the year 2020, I lived in NH (tax-free state) for the Jan-2020, and for the rest of the year, I was in IL.

So, my question is all the capital gains which I had made in 2020, do I have to pay the taxes in IL for all the 12 months or will it be pro-rated for 11 months?

e.g. If I had made $12,000 in capital gains in 2020, do I have to pay the IL state tax for the entire year or pro-rate the amount to 11 months that will become $11000 and pay taxes on it.

686

1 Best answer

Level 15

Apr 23, 2021 6:06:15 AM

Simple answer: You have to pay the IL state tax for the entire year.

It goes by where you lived when you received the income (realized the capital gain). So, if you sold the investment in January, the gain is NH income. If you sold it after your move, it is IL income.

Level 15

Apr 23, 2021 6:06:15 AM

Simple answer: You have to pay the IL state tax for the entire year.

It goes by where you lived when you received the income (realized the capital gain). So, if you sold the investment in January, the gain is NH income. If you sold it after your move, it is IL income.

Level 1

Apr 23, 2021 6:56:14 AM

Thank you for your reply @Hal_Al

So, in case if I had made $3000 in Jan-2020 (NH Income) and $9000 (IL Income) for the rest of the year as capital gain, then I have to pay IL taxes only on $9000. Is it correct understanding?

Expert Alumni

Apr 23, 2021 7:10:15 AM

Correct. However, keep in mind that while New Hampshire is generally a tax-free state, they do tax interest and dividends above a certain level. Make sure that the capital gains are not classified as dividends if this is the case, as those would be taxable in New Hampshire.

Level 1

Apr 23, 2021 7:17:59 AM

Thank you @DanielV01 for confirming and also sharing the details on NH taxation rules.

Yes, I am well within the limits for NH.

Cheers,

Jack

Expert Alumni

Apr 23, 2021 7:48:27 AM

You are very welcome @jack_2035

Why sign in to the Community?

Multiple states