Do I pay TX or MN state taxes for working in TX half the year?

[loyal-but---user]

Dear Tax Experts,

I worked and lived in Minnesota (MN) Jan 1 - Jun 30, 2019.

Then I worked in Texas (TX) Jul 1, 2019 thru Feb 2020 (ie this year), while living in TX and foreign countries due to employer requirement.

I left the TX employer end of Feb 2020, and returned to live in MN.

Since TX has no income tax, am I supposed to pay MN the state tax for the second half of 2019?

Thank you very much!

[AnnetteB6]

No, you would only pay MN taxes for the period of time that you were a MN resident or if you had income from a MN source.  Since you only lived in MN for part of the year, you will file a part-year resident return.

[loyal-but---user]

Dear AnnetteB6,

Reapply appreciate your instantaneous reply and advice!

Two quick follow up questions:

1. If I worked and lived out of Minnesota (MN) for, eg only a month, do I also only file a MN part year resident return?

2. If I lived in MN but worked for an employer in Texas (TX) for a month or longer, do I file a full year MN resident return or a TX return since my income is from TX?

Thank you very much!

[MayaD · Accepted solution]

1. TX has no income tax, if you lived and worked in MN for a month, you need to file part-year resident MN return and claim the income earned while living and working in MN. 

2.If you lived in MN and worked for an employer in TX, you need to file MN resident return and claim all your income from all sources (no income Tax in TX).

[loyal-but---user · Accepted solution]

Clarification and follow-up questions:

1. If I worked and lived in Texas (TX) for only a month, but lived and worked in Minnesota (MN) the other 11 months,

A. Do I file a MN part year resident return for the 11 months?

B. Do I file a TX return for the 1 month I lived and worked there?

C. Do I pay income tax to MN for the 1 month I worked and lived in TX as TX has no income tax?

2. If I lived in MN but worked for an employer in Texas (TX) for a month or longer,

A. Do I file a full year MN resident return and pay MN state taxes for the full year including TX income?

B. Or do I file a TX return for the period I worked for the TX employer since my income is from TX, and file a MN state part year resident return only for the income I earned in MN during the rest of the year?

Thank you very much!

[MayaD]

There is no income tax in TX so you won't file a TX return in any case.

1.You will file a MN part-year resident return and claim the income earned during the 11 months. Income earned while living in TX is not taxable on your MN return. In this case,TX income is not taxable on your state return. 

2. If you lived in MN the whole year, you need to file MN resident return and claim all your income, including TX source income.