Yes, it's quite likely you will be required to file a nonresident return in the state where the land is situated. The following will explain how to handle any tax payment to the other state on your resident return.
The credit for taxes paid to another state on the same income is used on your resident state because they do not want you to pay taxes twice on the same income. As the resident state all worldwide income must be included.
The credit for tax paid to another state on the same income will be the lesser of:
- the tax liability actually charged by the nonresident state, OR
- the tax liability that would have been charged by your resident state
If you don't have tax in one of the states, then there is not going to be a credit for that state.
Review the link below if you have questions about a particular state. You can also add any question here as you start to prepare your state returns.
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