Buying a home in NC

[Kirubim]

I am moving from CA to NC in September 2021 and purchasing a new construction home. I will be living in NC and working remotely for a CA company.  My domicile will be NC.  Are there any tax deductions or benefits to owning a home in NC that would alleviate my tax burden in CA?

[erinm0717]

Congrats on the move! Based on what you are telling me, you will need to file a part year resident return for NC and CA.  

While moving within the same state doesn’t change much when it comes to filing your taxes, if you moved to a different state, there are a few things to know as you get started on your returns.

1. You probably have a new state income tax rate

Each state taxes income differently—some don’t tax income at all! The state you moved to most likely taxes income at a different rate than the state you moved from. Just enter all of your info in TurboTax and we’ll calculate your state tax rate accordingly and include it in your state Tax Return Summary.

2. You might have to file a part-year return for each state you lived in this year

Depending on when you moved, you might need to file a part-year return for each state you lived in this year. When entering your personal information, let us know when and where you moved. After you finish your federal taxes, you’ll see your part-year states listed in the state tax section. Start with the state you moved from, and we’ll guide you through the rest.

Here are instructions for filing a part year state return: https://ttlc.intuit.com/community/state-taxes/help/how-do-i-file-a-part-year-state-return/00/26057

You will have to allocate your income per the time in each state you lived.  Here are instructions for that: https://ttlc.intuit.com/community/income/help/how-do-i-allocate-split-income-for-a-part-year-state-r...

I am not sure if this is your first home or not, but there are several deductions you can take on your federal return which will carry over to your state returns.  Here is some information on all of the deductions you can take: https://turbotax.intuit.com/tax-tips/home-ownership/buying-your-first-home/L5QxJLcQT.  Even if this is not your first home, most of the deductions in this link still apply.

Hope this  helps you!

[Kirubim]

Thank you for your response.

Follow-up clarifications please:

(1). Since CA requires an income tax even if it's not your domicile state why would it be necessary to mark when I moved. I guess that would apply to NC, but why in CA?

(2). Yes, this is my first home. As I will be working for a CA employer and will need to pay tax in CA, I was hoping there are benefits that would help reduce the burden.

Thanks.

[erinm0717]

1) It would be helpful to mark when you moved so CA knows you should no longer be taxed as a resident. It is good for them to have that on file

2) The link I gave you shows many benefits for having a new home. This will reduce your AGI on your federal which will carry over to the state returns.  It won't relieve the burden on the CA return directly but it will make a difference overall.  Hope that clarifies!

[NateTheGrEAt]

If you are living in NC and working in CA, then NC will offer a credit for taxes paid to CA so you will not pay double tax.