We are retired and moved from New Mexico to Maryland in the latter part of 2021. I have a pension plan from New Mexico; we also receive Social Security and some dividends. Should we do the NM return first and then the one for MD since we were residents in NM for the majority of the year? Will there be a credit on the MD return for taxes paid in NM? Will we need to file a return in both states from now on since the retirement comes from NM?
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TT recommends doing the return for your former state first. See these instructions:
How do I file a part-year state return? (intuit.com)
Retirement income is taxable only by your State of Residence at the time you receive it. So once you're residents of MD, your retirement income is no longer taxable by NM.
There will be no credit on your MD return for the taxes paid to NM. "Other state credits" are granted only when you have income taxed by both states. Example: a NM resident who works in AZ.
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