splitting income between domicile state and second home in anther state

[askadis]

Massachusetts is my domicile. In 2020 I spent 7 months in North Carolina because  of Covid. How do I allocate Social Security and investment income? I'm retired and have no earned income. Also I rent my house in North Carolina and have net taxable income of $2,038 for 2020. Does it get split or allocated to North Carolina?

[DavidD66 · Accepted solution]

Since you are a resident of Massachusetts, 100% of your income is taxable by Massachusetts.  Visiting your second home in North Carolina does not make your Social Security benefits you received while there taxable by NC.  100% of your North Carolina sourced income (which would include your rental property) is taxable by North Carolina. and should be reported on your NC non-resident tax return.  Your rental income is also taxable by Massachusetts, but they will give you a credit for taxes paid to other states so that you won't be subject to double taxation. Although if your only NC income is $2,038 then you probably won't owe any NC tax.  Because you have a rental property in NC, you should file a NC non-resident return every year. 

When you prepare your state tax returns, you should prepare your non-resident North Carolina return first.

[askadis]

Thank you for the clear and helpful response.

Audrey