Moved in the year so has income in 2 states

[bcw4]

Hi, I'm under an F-1 visa (OPT) who lived for half the year in Indiana and the other half in Washington. For each state I received income from different companies/institutions. How will this affect my federal or state tax filing? Are there anything I should do to ensure I'm not taxing an income more than once?

[MonikaK1]

The state of Washington has no income tax, so you won't need to file a state return there. If you meant Washington, DC, you would need to file a District of Columbia return, which is much like a state return.

To make sure that you report and pay the correct amount of federal and state taxes, prepare the Federal return first in TurboTax. Then, if you lived in Indiana the first half of the year, prepare that return next. TurboTax will ask questions about your dates of residency and the source (state) where each item of income was earned. Each state has its own rules for allocating income for part-year residents.

If you have to file a second state return for the remainder of the year (such as District of Columbia), you will be asked more questions in the program and will be able to exclude income from the other state and/or be eligible for a credit for tax paid to the other state, so that the income isn't double-taxed at the state level.

Please also see this TurboTax tips article for more information on filing returns with multiple states.

[bcw4]

I did mean the state of Washington so thank you for the clarification. I have a few follow-up questions:

1. Will TurboTax be able to help me file for IN state and federal tax as a non-resident alien? If not, are there resources from TurboTax that can help with this?
2. For non-income things (ex: bank interest) that I obtained throughout the year, which state would this be for? Indiana or Washington or both?

[DawnC]

1.) No.  Although TurboTax doesn't support IRS Form 1040-NR (U.S. Nonresident Alien Income Tax Return), we have partnered with Sprintax to offer both federal and state tax preparation for international students, scholars, and nonresident foreign professionals.  Please visit the TurboTax/Sprintax site for more info.

2.)For unearned income, it is allocated to your resident state - so, whichever state you lived in when you received the interest or other unearned income.  

[bcw4]

For Q2, what if the unearned income, like bank interest, has no clear distinction when the amount was received while I was living in Indiana or when I was living in Washington?

[DianeW777]

it depends. The easiest method would be to use the bank statements. Your statements will show you when the interest was credited to your account.  This can be used to calculate the amount that applies to your residency period in each state.

If the interest was earned evenly throughout the year then it's as simple as dividing by 12 months, then multiply by the number of months of  residency in each state. Otherwise you can use the number of days in the interest payment cycles for each period. Any reasonable method will be acceptable based on when the interest was earned.

@bwilliem