Part year resident 1099int allocation

[rh61]

I spent Jan through June of 2025 as a  NY resident.  Employment and NY lease ended on 6/30.  Spent the next three months on an extended vacation, using a friends address in NJ.  I had no W2 related income during that time.   I returned to MD in Sept, started a new job and obtained a lease.

For my 1099int income   Is the right allocation 50% for NY,   25% for NJ (even though no formal residency was established, it was just hanging out), and 25% for MD ?   In other words,  is it OK for 25% of the interest income escape state taxes since its below NJ filing threshold ?  or am I a resident of NY until MD residency is established. 

[AmyC · Accepted solution]

Reality is a bit different. You were very clearly a NY resident the first 6 months. You remain a NY resident until you can prove you aren't. NY has a 184 day rule where you become a NY resident for the year. A new license, new lease, new job all indicate you may not be a resident. Of course, some people take temp jobs and haven't really moved. Those people don't change their license, voting, tags, etc. Another example would be your vacation in NJ, not a resident, just passing through.

Take a breath and think about the sequence of events. Was everything moved with moving trucks on June 30? When did you sign your new lease in MD? What can you prove? NY comes after people to get their money and they come hard. Be sure you are ready.

Once you determine what you can prove, your dates of residency for NY and MD are established.

If you are a NY resident for the year, you can claim a credit for the tax paid to MD on the same income. The credit will be the lower of the state tax liabilities on the same gross income. You may owe your resident state,  if they have a higher tax rate along with differences in how the taxable income is calculated.

[rh61]

Thanks, 

I will use the start date of my MD lease, which is only a few days before the start date of my MD employment as the demarc between NY and MD residency.  My documented last day of NY employment and expiration of my NY lease is 3 months before that and only income in those 3 months is via 1099int.... but it's not worth messing with it.  

[rh61]

I'll redo return. Seems I need to do MD first and NY second to claim credit on taxes paid to MD.  

[DawnC]

No, you can take a credit for taxes paid to another state.    From Amy's post above : 

If you are a NY resident for the year, you can claim a credit for the tax paid to MD on the same income. The credit will be the lower of the state tax liabilities on the same gross income. You may owe your resident state,  if they have a higher tax rate along with differences in how the taxable income is calculated.

[DawnC]

You can go back and edit your state returns to take the credit.   Do I have to file tax returns in more than one state?   

If you are preparing part-year state returns, see  How do I file a part-year state return?

and How to allocate income on a multiple state return with earned and unearned income