`
cancel
Showing results for 
Search instead for 
Did you mean: 
Highlighted
New Member

I moved to Missouri from Tennessee - why do i have to pay income tax on income earned out of state?

I worked and lived the first half of 2016 in Tennessee, a state with no income tax, then moved to Missouri and since a resident now am being charged income tax on all the money I made while in Tennessee. Is there a way to avoid this?
1 Reply
Highlighted
New Member

I moved to Missouri from Tennessee - why do i have to pay income tax on income earned out of state?

You should only be paying MO state income taxes on your MO-source income only. Just make sure that you are doing a MO part-year state income tax return and only reporting your MO-source income on this MO part-year resident state income tax return.

MO taxes all the income reported when calculating MO state income taxes (whether resident, part-year resident or nonresident) but you will only be required to paid a portion of the total MO state income taxes calculated (your percentage of the total MO tax that relates to your MO source income only)

The way that the MO state income tax return works is that MO looks at all of your income from all sources and generates a total MO state income tax on all income. When MO is determining the actual MO state income taxes that you owe, MO multiples the total MO taxes on all income by the percentage of MO source income over all source income. So if all your income is $10,000 but MO source income is $8,000, MO will calculate the MO state income tax on $10,000 then multiply this total tax by your MO source income over total income ($8,000/$10,000) to get your percentage of MO state income taxes on your MO source income. So in this instance, your MO state income tax liability would be 80% of the total amount of MO taxes generated (on all income). That is why all your income is being reported on your MO state tax return.

You can preview your MO Tax summary to see what portion of the total taxes for MO you are actually paying

To preview MO Tax Summary:

  • TurboTax Online sign-in, click Here
  • Under Tax Timeline, click on Continue your return
  • Go to "My Account" > "Tools"
  • Under the Tools Center, select "view tax summary"
  • Select "MO Tax Summary"