Will I owe a full year of Missouri State Income Tax even though I moved to MO in Nov from Texas (which has no state tax)? My MO return shows I owe a huge amount +penalty.

[trb11]

I expected to need to pay Missouri state tax on the 2 months I lived here (just Nov & Dec), not for the entire 2023 year, since Jan - Oct I lived in Texas. Maybe it is a bug in Turbo Tax, or I selected something wrong.

Any assistance is appreciated.

[Cynthiad66]

No.  You should only owe taxes for the two months you lived in MO.    Let's figure it out!  

In preparing your return, you must ensure that you answer the questions about where you lived accurately in the "My Info" section of the return.  Also, make sure that you answer the interview questions about how long you have lived in MO accurately.  It must show a Part-Year or Non-Resident Return.

If you were a resident of two different states during the tax year (for example, if you moved from one state to another), you'll normally file part-year returns in both states, assuming each state collects income tax and you had income in each state.  In your case, Texas does not have income taxes so no return is needed for Texas.

TurboTax handles part-year returns, but you need to make sure you've set up your personal information correctly for us to do so. TurboTax will ask about where you lived in 2023 when you set up your personal information.  For more detailed instructions use this link:  How to File a Part-Year State Return

Just for further clarification, see the exhibit below on how MO taxes part-year resident's income.

See Line 1 breaks out Missouri Income from total income.  If you use the instructions above and enter dates lived in MO correctly, the software should compute the taxes on MO income only.

[SteamTrain · Accepted solution]

@trb11 

Did you figure it out yet?

MO is one of only a couple states that has Part-Year residents file their taxes one of two ways, either as:

1) As a full-year resident, where they tax everything...but allow you a credit for the taxes you had to pay to the former state.  (but no credit for you since TX didn't tax anything)

or

2) As a full-year Non-Resident...then identifying what sub-part of the year's income you actually received while in MO.

You need to make sure you select option as a full-yr Non-Resident at the very beginning of the MO state interview...then go thru the entire MO state Q&A to identify just the MO wages, interest dividends..etc. received after you moved to MO.

[trb11]

@SteamTrain 

Thanks for this. I thought my selection might have been wrong earlier, but the description on Missouri's website made me think I needed to use the first option. Your response helped me understand it better. Once I changed it, the large amount owed magically disappeared 🙂

Thanks again!

[trb11]

@Cynthiad66 

Thanks for your response. It was very detailed. I still found myself a little confused, but that was on me (not you). I really appreciate the time you took to respond!