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Level 2
posted Oct 15, 2022 4:42:48 AM

With multiple states is federal income deductions split based on where you work or you live?

With multiple states is federal income split based on where you work or where you live?

0 3 454
3 Replies
Level 15
Oct 15, 2022 6:34:51 AM

Both.

This is the general rule: The income is work state (WS) source income since it was earned there. Resident States (RS) tax all their resident's income, regardless of where earned. You will file a non-resident tax return for the WS and report the WS income. You will file a full year resident return for the RS, reporting all your income. The RS will give you a credit, or partial credit for any tax paid to the WS.

 

If you have a reciprocal state situation, the answer is different. See https://ttlc.intuit.com/questions/2895760-which-states-have-reciprocal-agreements

 

For more specific advice, please identify the states. The rules vary. For example, ther are a handful of "contrary states", where the WS gives you a credit, instead of the RS.

Level 2
Oct 16, 2022 12:15:25 PM

Thanks very helpful! Are Indiana, Illinois, Michigan work states,  or resident states?

Level 15
Oct 16, 2022 12:56:36 PM

A "work state" is a state you WORKED in.   A "resident state" is a state you LIVED in.  We do not know which is which for you----only you would know where you lived and where you worked.