Wife and I own 2 houses, each in a different state. How to file taxes if we each claim residency of one house.

[Superholez50]

So my wife and I own two houses. One in California and one we recently purchased in Arizona. We are both employed in California, she works in state and I work remotely. We always file taxes MFS in California (10 years). She has a CA driver's license, mine is in Arizona. My vehicles are registered in AZ and I keep all my cool stuff there (boat, jet skis, motorcycles, 4x4, etc). We spend about half time at each residence depending on work schedules. My question is, should I continue to file MFS with her in CA since my employer is based here, or should I be filing in AZ, should I be paying taxes in both? Owning two residences in different states has been rather confusing to say the least, and the residency thing is very confusing when it comes to tax stuff. I know the CA FTB can be ruthless with this stuff. Just not sure what the correct path is for the coming tax year. Thanks for the help.

[rjs]

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@Superholez50 wrote:

Just not sure what the correct path is for the coming tax year.

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The correct path is for you and your wife to meet with a local tax professional who can examine all aspects of your situation in detail and advise you on how to handle it. With a situation as complex as yours, you need continuing professional guidance. Your situation is much too complicated to deal with in an online forum like this.

Residency is not determined by what you "claim." It's determined by "facts and circumstances." Each state has its own definition of a resident for income tax purposes (which can be different from the definition for other purposes). Since states have different definitions of a resident, it is possible to be considered a resident of two states at the same time. Here are links to information about the California and Arizona definitions of a resident.

FTB Publication 1031, 2023 Guidelines for Determining Resident Status

Arizona Individual Income Tax Procedure ITP 92-1, Procedure For Determining Residency Status

You should also discuss with your tax professional whether it makes sense to continue filing separately.

[Superholez50]

Thanks for the reply. I will try to find a tax guy. We will still file MFS, we have always kept our money separate.