IRA Distribution for mid year move

Forum|Forum|5 years ago
May 6, 2021
3 replies
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How do I allocate and IRA distribution between two states after a mid year move? Specifically, the IRA distribution came in after I had already moved. Does this mean the distribution applies only to the state where I now live (Colorado) or should I allocated the distribution by percentage of time in each state?

Thanks in advance.

ColeenD3

Level 15

It is taxable to the state in which you lived at the time of the distribution. Please see this post for more information. Distribution

egethnerAuthor

Level 2

Thank you. One last question: in box 15 of the 1099-R the state listed is Illinois but I will be reporting the income from the distribution in Colorado. Will this cause a problem or red flag for the Illinois state taxes for 2020?

Thanks again.

ColeenD3

Level 15

Since it shows that it was taxable to IL, you may encounter a problem. One solution is to file an IL return and take a credit on the CO return.

Part-year Residents of Colorado

A part-year resident will generally not claim the credit for tax paid to another state because the income is usually taxed only by the state of residency when the income is earned. However, if income is earned from sources in the other state while the taxpayer is a Colorado resident, then it may be taxed by both states. If this is the case the tax credit can be claimed. The computation of the credit for taxes paid to another state by a part-year resident is complicated. The following definitions will help determine the amounts that should be entered on the 104CR. If claiming credit for taxes paid to multiple states, a separate 104CR form must be completed for each state.

CO PY