My permanent residency is in Michigan, but I am temporarily residing in Oregon and all of my income earned (I have a single W-2) for 2016 was in Oregon. How do I know what income is taxed by both jurisdictions and what do I need for my Michigan tax return?
State tax law always refers to "domicile" when determining residency.
If you believe Oregon is a temporary job site and that Michigan is your permanent residency then use the information below to prepare both a nonresident and resident state return.
Follow the steps here to select the residency status of both states. Then prepare the nonresident return first and TurboTax will carry the information to the resident return, but monitor the screens to select "credit for taxes paid to another state".
Resident State: All income worldwide is required to be reported on your resident state return. Any money that is also taxed in a nonresident state allows you to use "credit for taxes paid to another state" when you complete your resident state return. Your resident state does not want you to pay tax twice on the same income.
Nonresident State: Any money earned in a nonresident state is required to be reported on that state tax return (with the exception of reciprocal agreements which does not apply in this case). The nonresident state will tax any income earned while you were in that state. Complete this state return first.
State tax law always refers to "domicile" when determining residency.
If you believe Oregon is a temporary job site and that Michigan is your permanent residency then use the information below to prepare both a nonresident and resident state return.
Follow the steps here to select the residency status of both states. Then prepare the nonresident return first and TurboTax will carry the information to the resident return, but monitor the screens to select "credit for taxes paid to another state".
Resident State: All income worldwide is required to be reported on your resident state return. Any money that is also taxed in a nonresident state allows you to use "credit for taxes paid to another state" when you complete your resident state return. Your resident state does not want you to pay tax twice on the same income.
Nonresident State: Any money earned in a nonresident state is required to be reported on that state tax return (with the exception of reciprocal agreements which does not apply in this case). The nonresident state will tax any income earned while you were in that state. Complete this state return first.