Regarding Residency

[sureshsri]

My W2 is coming from a company in Indiana and Indiana state tax has been withheld from my paycheck every month in 2021. But due to Covid situation our company allowed employees to work and remote. I won a home in Florida and so I worked from Florida for this Indiana company for about 7 months in 2021. Can I file Fed and Indiana taxes as a Florida resident? Please advise. Thanks in advance.

[ErnieS0 · Accepted solution]

It depends on whether you still consider Indiana to be your home. 

If you permanently moved to Florida, you can file a part-year Indiana income tax return and report to Indiana 5 months of income, since you lived in IN for 5 months in 2021.

Otherwise, you'd have to report all your income to Indiana. Indiana residents pay tax on income earned anywhere.

Indiana says: "You are a full-year Indiana resident if you maintain your legal residence in Indiana from Jan. 1 through Dec. 31. You do not have to be physically present in Indiana the entire year to be considered a full-year resident. 

"For example, Tom and Jane stay at their Florida condominium from Nov. 1 through March 1 each winter, and return to their Indiana home the rest of the year. Since they didn't take steps to become Florida residents (such as registering to vote in Florida, getting a Florida driver's license, etc.), they are full-year Indiana residents for income tax purposes."

See: General Tax Information

[sureshsri]

Even though I lived in Indiana for few months in 2021, I own a home in Florida and I still have FL driver license.

But I worked remotely from FL for a company located in Indiana. Does it still make me an Indiana resident?

If I change my residential address to FL on turbotax premier, there is significant reduction in the Indiana state tax that I owe. So thought of taking advantage of my FL residency.

Appreciate any advice and clarification. Thanks in advance.

[Vanessa A]

If you lived in Indiana for a few months during the year, you are a part year resident and would need to file your taxes as such.  You will need to pay taxes on the income you earned while a resident of IN. 

[sureshsri]

Thanks, one last confirmation please. My wife and I own a home in FL and still maintaining our Florida driver license. So we can file Indiana taxes for the number of months we lived in Indiana in 2021, as a FL resident right? Thanks in advance.

[BillM223 · Accepted solution]

The is a question of "domicile". Your domicile is your permanent residence, the place you go back to when you are finished traveling or working or visiting elsewhere.

Your domicile is the place where you have a drivers license, have registered to vote, pay utilities, have a landline (if people still do that), where you receive your mail, and where you tell people that you live.

People have only one domicile, and the domicile does not change unless you take positive steps to change it (register to vote in the new location, buy a house, get a drivers license, forward your mail, etc.)

So, based on your description, it sounds like you used to live in Florida, own a house, have a license, etc., and for a few months, you went to Indiana to work. That does not amount to a change of domicile unless you did all these other things in Indiana, and it sounds like you didn't.

If you did not intend to make Indiana your home, then you were not a resident - see this law quote.

So it looks to me, not knowing anything more than what you have described, that you are a Florida resident who worked temporarily in Indiana, making a nonresident of Indiana.

You would file a part-year return for Indiana ONLY if you moved to Indiana with the intention of staying there. Otherwise, you are a nonresident.

[sureshsri]

Thank you very much BillM223 for the detailed explanation.

Best Regards

Suresh

[Yazmin23]

If an employee is a FL resident but their employer's  corporate office is based out of IN and the employee works 20% of the time in IN and the remaining 80% in FL, should they file a non-resident tax return for IN?

In 2022, this employee worked approximately 100 days throughout the year in IN and the employer taxed the employee for those hours/days, as IN earned wages.  Was the employer correct in doing this?  Should the employee file his Federal tax return as a Florida resident, and report the wages earned in IN as noted on the W2?  Can the employee only enter the wages earned in IN when filing or should they enter all wages?