I lived out of the country but the 1099-MISC form I received lists my old address in Maryland. Do I have to file a Maryland tax return?

[roxjans]

I lived out of the country for all of 2015, but I worked remotely for an employer in California. The 1099-MISC form I received lists my old address in Maryland. Do I have to file a Maryland tax return?

[ValerieE · Accepted solution]

If you are still considered a resident of Maryland (your absence from the state is temporary in nature and you intend on returning to Maryland) then you would report the income to Maryland.

If you are no longer a Maryland resident then the income is not reportable to Maryland just because the 1099-Misc has a Maryland address on it. 

[roxjans]

I don't intend on living and working in Maryland but I still have a Maryland driver's license. The address on both the 1099-misc and my driver's license is my parent's home in Maryland, would Maryland still view me as a resident?

[ValerieE]

If your permanent home is in Maryland or you maintain a place of abode in Maryland and are physically present in Maryland for 183 days or more you must file as a resident of Maryland.  The question for you is where your permanent home is.  Intent plays a role in this determination but is not the only factor.  To change your residency you have to abandon your old resident state and establish residency somewhere else.  If you are still registered to vote in Maryland, hold a Maryland driver's license, and use a Maryland address, it is very likely that Maryland will still consider you to be a resident of Maryland.  Maryland specifically address moving out of the country by saying, "In order to establish a new superseding domicile, the taxpayer must be physically present in the state or foreign country that the individual intends to be the new domicile. For example, a taxpayer cannot leave Maryland for an assignment in Spain, but claim Florida as their new domicile without being physically present in Florida and without taking steps to establish the new Florida domicile."  Maryland is also specific in that you are considered a Maryland resident until you take specific steps to establish residency (domicile) in another state/country.  This would include registering to vote there, obtaining a drivers license there, and being physically present in the new state/country.

[roxjans]

I am registered to vote in Maryland so it seems that I do have to file a resident tax return in MD. This leads to other questions. I also did work for a company that is based in New York (but I worked remotely from overseas as well--I work as a freelance artist), so I am filing a non-resident tax return for NY. I pass the Bona Fida Residence test so I can claim Foreign Tax Credit on the money I made through foreign companies, and that also proves I have been living overseas. Do I have to pay Maryland tax on the money I earned from New York if I file a Maryland resident tax return?

[roxjans]

Also since I lived out of state during the 2015 tax year and was living in a foreign country on December 31, 2015, can I claim to be a part-year resident on the MD tax return?

[ValerieE]

You do not need to file a New York return.  You only need to file the Maryland return because you are considered a resident of Maryland.  You will report all of your income on the Maryland return; this includes the income from New York and anywhere else.  You cannot claim to be a part year resident just because you moved out of Maryland.  You have to establish residency somewhere else before you will no longer be considered a Maryland resident.  This applies to being a nonresident or a part-year resident.

[roxjans]

My situation is a bit more complicated. The W-2 from my work done with the NY studio lists my old address in New York when I lived there in 2014 so New York state has taken tax out of my paycheck, so it seems that I do have to file a New York tax return to get back some of the money. I am living in Sweden currently through a residence permit that lets me live and work there for two years and I have been making income in Sweden through 2015 so I have to report my foreign income.

To say that I am a full-time resident of Maryland in my MD tax return, would that affect me passing the Bona Fida Residence Test in order to get the Foreign Tax Credit and Health care exemption?

[ValerieE]

Ok.  Yes, if you are claiming a refund of withheld taxes you do have to file a New York return.  Just didn't want you to think you had to file a return in New York because the company was located there.

Filing as a resident of Maryland will not affect your Federal Foreign Tax Credit or the Health Care Exemption.  Both of those are based on a "number of days out of the US" calculation.  You can be out of the country on a temporary absence and still be considered a resident of a state.  Just like being out of the country does not affect your US citizenship status.