Residency Ohio to North Carolina

[Keith B]

In June, I started a new job with a company that is located in North Carolina and my office location was in North Carolina.  My new employer started taking North Carolina taxes with my first paycheck in June.  At the time, we were living in Ohio and did not relocate until September.  We started paying rent for a home in August.  I did not work in the office at all until relocating to North Carolina.  When would be my residency in North Carolina start?  Turbotax gives the following potential dates, including start of work, paying rent, arrival in the state, belongings arrived, or applied for a state driver's license.  All of these are different dates for me.

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Date You Established Residency

The date you choose as the first day of residency can coincide with one of the following events:
- You or your spouse arrived in the state or country
- Your belongings arrived
- You or your spouse started work
- You started renting your new place
- You purchased your new home
- You or a family member enrolled in school
- You or your spouse registered to vote
- You or your spouse applied for a state driver's license

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Thanks,

Keith

[DawnC · Accepted solution]

You can use any of those triggering events as the date of relocation.   You are going to need to file part-year resident state returns (full instructions are in that link) for both Ohio and North Carolina.  Next year, you will file one full-year North Carolina resident state return as long as you don't move again during 2022.

When you complete part-year returns, you will need to allocate your income (more info on how to allocate is in that link) between states and the date of residency will come into play for these allocations. 

If your employer started withholding taxes too early, filing the part-year returns and allocating the income by state will correct the issue.

You might think that part-year taxes are proportional to the amount of time spent in the state, but that's often not the case.  Most states divide the income earned in that state by the total annual income to come up with a percentage.  That percentage is then applied to the state tax on the entire year's income—no matter where it was earned—to prorate the tax liability. TurboTax follows the rules for each state.

[Hal_Al]

I would use June 1st, the first day your employer started withholding NC tax.  Otherwise, you risk some kickback from the NC tax people when what you file doesn't agree with your W-2.