Earning in two different states

Forum|Forum|4 years ago
February 15, 2022
1 reply
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Hello

I worked in Colorado and Michigan for year 2021. I have received two different W2s from my employer. I have received small interest from my trading account. They have provided me 1099-int. To which state will I pay tax for that interest earned. Also what will be my residency status in each state like resident or non resident

Not A Product Question

Best answer by ErnieS0

Colorado considers restricted stock unit proceeds to be taxable to nonresidents. The state says:

Income from the exercise of employee stock options is Colorado-source income if such income is treated as compensation for federal tax purposes and to the extent the employee worked in Colorado during the period the employee was required to work for the employer prior to the exercise of the option.

See GIL 20-004 December 18, 2020

HelenC12

Level 15

You'll be a part-year resident in each state. See How do I file a part-year state return? We suggest you prepare the return for your former state first, followed by the return for the state you currently live in.

To report your 1099-INT, allocate the interest you earned as a CO resident to CO, and the remainder to MI. An easy allocation method is to divide the year's interest by 12, and then multiply the figure by the number of months you lived in each state. Please see How do I allocate (split) income for a part-year state return?

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yashKAuthor

Level 4

@HelenC12 Thanks for reply. Also I received some RSUs. My RSUs were allocated to me in 2020 when I was in Colorado but they were vested for the first time in Aug 2021 when I started living in Michigan. My employer sells some stocks to cover taxes. I see in my W2 and in my paystubs that my employer has withheld all the RSU related taxes to the state of Michigan. Is that correct ? Do I need to pay all the taxes on my vested RSUs to the Michigan state or do I need to make calculations about how many days I lived in state of Colorado and fill my taxes accordingly