What do I enter for "State of Residence"?

[stong]

I lived and worked in California (CA) for several years. I temporarily moved to Virginia (VA) in June 2021 and intend to move back to CA in 2023.

How do I answer the "Your Info" TT questions:

1. State of Residence: California (?) Is this asking where I was living on 12/31/2021 or is it asking where is my domicile?  I lived and worked in CA Jan - mid June 2021; then lived and worked in VA  starting 6/25/2021 (188 days in 2021) but flew back to CA for 2 weeks in late 2021.

2. "Previous state of residence (State where you lived before moving)" - I lived in CA before moving to VA, but TT doesn't let me use CA for both "State of Residence" and "Previous state of residence"

3. "Date you became a resident of your new state" 6/25/2021?

4. Am I a part year resident of CA and VA for 2021? or a part year CA resident and a VA non-resident?

5. For next year's (2022) taxes, I'm working and living in VA the whole year, except maybe 3 weeks returning to CA. So will my "State of Residence" for 2022 taxes be VA? and would I be a CA non-resident and a VA resident for taxes? Thanks.

[LenaH]

Per the State of Virginia, a person who lives in Virginia, or maintains a place of abode here, for more than 183 days during the year, or who is a legal (domiciliary) resident of the Commonwealth, is considered an actual Virginia resident for income tax purposes. Since legitimate Virginia residency is established, the fact that you are moving back to California in 2023 is irrelevant.  California will allow Virginia to be the primary to tax the income. 

The reason California would allow Virginia to be primary is that most states (along with the IRS) have a specific definition of tax home and temporary.  Temporary assignments generally have to be expected to last 1 year or less and usually have to actually last one year or less to qualify as temporary.  Since you are stating that your Virginia assignment will last for more than one year, and you are meeting the Virginia definitions of an actual resident during that time (maintaining a residence of some sort in Virginia), your income would belong to Virginia.

Therefore, you can file for 2021, 2022, and 2023 in the following ways:

• 2021: Part-year resident of California and Part-year resident of Virginia
• 2022: Full-year resident of Virginia only
• 2023: Part-year resident of California and Part-year resident of Virginia (if you move back in 2023)

@stong

[Edited 3/8/2022 l 12:40 PM PST]

[stong]

Thanks.

I read the thread below many times and I'm struggling to understand it, as it sounds very similar. The thread has a link to VA tax instructions and it sounds like I meet VA's definition of "actual resident" and should be filing as a VA part year resident for 2021 and VA resident for 2022 taxes. (see last reply by TomD8) https://ttlc.intuit.com/community/state-taxes/discussion/do-i-list-va-as-a-st-of-residence-on-12-31-...

It seems I might meet VA's definition for "actual resident" if my apartment lease implies "maintained an abode".  Does it sound right that I should be filing as both a VA part year resident and CA resident (i.e., CA domicile) for 2021 taxes?  pg 5 of VA tax instructions:

"Actual Resident

You are an actual resident if:
You maintained an abode in Virginia or were physically present in Virginia for more than 183 total days during the taxable year, even if you are a domiciliary resident of another state or country."

pg 5-6:  https://www.tax.virginia.gov/sites/default/files/vatax-pdf/2021-760-instructions.pdf

6. IF I meet VA's definition of "actual resident" (i.e., "maintained an abode") then should I be filing as a part year VA resident for 2021 taxes even though I lived in VA <183 days (and conversely lived in CA >183 days) in 2021 and my domicile is still CA? Does this sound right?

I don't intend to change my domicile from CA. Would I still complete the VA resident portion first (then CA returns) so credit calculates properly?

7. Also, since it appears I meet VA's definition of "actual resident" then should I be answering:

State of Residence: California (?) Virginia; and answering "yes" to I lived in another state in 2021?

Expanding on my earlier question #5 and your reply:

"5. For next year's (2022) taxes, I'm working and living in VA the whole year, except maybe 3 weeks returning to CA. So will my "State of Residence" for 2022 taxes be VA? and would I be a CA non-resident and a VA resident for taxes? "

>>"For 2022, you will still be a full year California resident and a Virginia nonresident if you are still planning to return to California and you did not change your domicile to Virginia."

For 2022, I am working in VA and living in VA >183 days (and renewing 1 year apartment lease). So VA's tax definition for "actual resident", seems to say I should be filing as a VA resident for 2022. Would I also file as a CA resident (my domicile); and which order do I fill out the returns to ensure the credit calculates properly?

Thank you for helping us all with these questions. I've been pulling out what little hair I have left. 🙂

[ErnieS0]

It depends. Much of it depends on your intent. It is possible to be a resident of more than one state because of how each state defines residency.

If you moved to Virginia temporarily for employment purposes and have not been away from California for more than a year and a half (546 days), then you remain a California resident if you did not take any steps to give up your residency.

Any individual who is a resident of California continues to be a resident when absent from the state for a temporary or transitory purpose.

An absence from California under an employment-related contract for a period of at least 546 consecutive days may be considered an absence for other than a temporary or transitory purpose.

2020 Guidelines for Determining Resident Status

If your employer is withholding VA tax and you have no definitive end date for your VA employment I think it would be simpler to be a part-year resident of both states even if your intent is to eventually return to CA.

[stong]

Thanks LenaH, I'm getting closer and need a tiny more of your expertise:

So for

• 2021: Part-year resident of California and Part-year resident of Virginia  - - Q: For 2021 tax return "State of residence" I assume I answer with VA (since I'm maintaining an abode in VA now), and to "previous state" answer as CA?; then fill out VA state return first, then CA return to get proper CA credit?
  

• 2022: Full-year resident of Virginia only - okay
• 2023: Part-year resident of California and Part-year resident of Virginia (if you move back in 2023) - - Q: Reverse my 2021 steps: "State of residence" answer would then be CA - assuming I moved back in 2023; and say "previous state" is VA; then fill out CA state return first, then VA to get proper state tax credit?

[LenaH · Accepted solution]

In 2021, your state of residence would be Virginia as of December 31, 2021, with your previous state of residence being California. You would file two part-year returns - California and Virginia. 

Did you earn Virginia sourced income while you were a California resident and/or California sourced income while you were a Virginia resident? If not, then there will be no credit of taxes paid to another state. In this scenario, each part-year resident return will tax your income earned while being a resident of that state. If there is no credit, you can fill out your state returns in however order you wish. 

In 2023, your state of residence would be California as of December 31, 2021, with your previous state of residence being Virginia. Again, it does not matter the order if there will be no credit to another state. 

@stong

[stong]

One more clarification - I finished the VA part year resident return portion, and starting the CA part year resident portion and got stuck on "where were you domicile"? For domicile, should I answer California, since I intend to return there in 2023 even though I'm leasing an apt in VA from 6/2021 - mid 2023? or should I answer VA for "where were you domiciled [in 2021]?

[DMarkM1 · Accepted solution]

You would answer VA to that question this year and answer CA for 2023.