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ctsai_2000
New Member

Do I need to report interest income in nonresident state?

I already reported all bank interests as income in federal and resident state returns.
1 Best answer

Accepted Solutions
ChristinaS
New Member

Do I need to report interest income in nonresident state?

Not usually. Most (if not all states) consider interest and other investment/ unearned income to be allocable to your resident state. However, there could be an exception if the interest is related to a business which operates in your nonresident state.

If you are asked to allocate income to the nonresident state, do not allocate the interest unless there is something special about the interest. If there is, you will need to inform us of the state and situation in further detail so we can pass along targeted guidance.

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3 Replies
ChristinaS
New Member

Do I need to report interest income in nonresident state?

Not usually. Most (if not all states) consider interest and other investment/ unearned income to be allocable to your resident state. However, there could be an exception if the interest is related to a business which operates in your nonresident state.

If you are asked to allocate income to the nonresident state, do not allocate the interest unless there is something special about the interest. If there is, you will need to inform us of the state and situation in further detail so we can pass along targeted guidance.

daniel-j-morton
Returning Member

Do I need to report interest income in nonresident state?

Thanks, can you pls clarify what you mean by "However, there could be an exception if the interest is related to a business which operates in your nonresident state." Presumably all investment earned is related to an entity conducting business. I have received a notice from the California Francise Tax Board saying I have California sourced income (I am not California resident). This means then that as an investor I could pay taxes in the state making the dividend/interest payment, then in my resident state then at the federal level? pls advise. thanks.
matt-hickman
New Member

Do I need to report interest income in nonresident state?

hi
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