Son's taxes: Kansas vs Missouri Residency

[videot7]

My 24 year old son and I are discussing whether or not he should transfer his plates and driver's license from Missouri to Kansas after taking a job which would last 1.5 years at most, before he moves up the career ladder towards his career goal.  After which, he will probably move permanently away from Kansas (as well as our home in Missouri).

After checking around a little, we determined that he could probably keep his plates and driver's license here in Missouri with little issues as far as the car is concerned.  He is a part-time student here in Missouri, taking online classes here and is close to graduation, so he doesn't want to have to transfer to another school so late in the process.  As such, it seems as if we should just let him maintain his residency here in Missouri.  Also, almost all of his possessions are still here at the house in Missouri.

However, it has occurred to me that there may be an issue with Kansas state income taxes at the end of the year with him being a Missouri resident.

While I'm sure that TurboTax will help to straighten all this out, I would like to advise him properly and avoid surprises.

I guess my question is: Will there be any tax penalty for not having transferred to Kansas from Missouri?  And is there anything else that we should know about this kind of situation?

Thanks for any help you can give.

[Bsch4477]

He will be a resident of the state where he lived more than 6 months and a part time or non resident of the other state since he doesn’t plan to return to Missouri. 

[NCperson]

he is a resident of the state where he lives (sleeps) - NOT where he works.  TT will ask when he moved to KS and where he was living on 12/31 and figure out the state rules from there. 

further, he has to file income taxes in the state where a) he lives and b) where he works. 

it's not clear from your post where you son is living. 

If he is living in MO and working in KS, he is a resident of MO but has to pay taxes to KS.  He'll file in both states, paying tax to KS and then the MO tax return will also calculate tax on the same income, but provide a credit for what was paid to KS, so he is not paying tax on the same dollar twice.

if he is living in KS and working in KS, then he will only file KS taxes. 

[TomD8 · Accepted solution]

@videot7 --

You may wish to read Missouri's rules as to who they consider to be a resident for tax purposes.  Here's a link:

https://dor.mo.gov/taxation/individual/additional-resources/non-residents.html#:~:text=Resident%20%2....

Generally speaking, he will be considered a resident of MO until he abandons his domicile in MO and establishes it (as demonstrated by his actions) in another state.

If he changes his domiciliary state in 2022, for 2022 he will file a part-year resident tax return in each of the two states.

[videot7]

Thanks for the replies and the link from @TomD8 :

Looking at the link, it seems as if he has made our house in Missouri his domicile.  He comes home for three or four days each month to visit, take care of business and take exams here at the university.  So that would fulfill the "30 day" condition.

Am I correct in assuming that he is a resident of Missouri, then?

To clarify:

1. He is a flight instructor working in Kansas.  As such, he is working there somewhat temporarily as is typical in the aviation industry to accumulate hours and then he moves on to a regional airline.  He has signed a contract with that airline and anticipates that he will moving into that position by Spring 2023.
2. He is living in Kansas in an apartment supplied by his employer and pays $150.00 a month for that apartment.  Most of his possessions are here in the house here in Missouri.
3. When he transitions, he most likely will transition here in Missouri, while he collects his belongings here and moves on to his new position.  At that point, he would be changing his domicile, probably to South Carolina.  But that will be in 2023.

But it seems according to the chart that none of the above changes his Missouri residency.

Really, this is not about the taxes.  He knows that he will pay taxes, and he doesn't really care who he pays them to.  We'll let TurboTax figure that part out. 

I just want to make sure that filing taxes in KS wouldn't kick in some kind of penalty for not changing the plates and driver's license. 

Does anyone see a problem with the conclusion that my son has made his domicile in Missouri and therefore is a resident because he will have spent 30 days here in 2022?

Thanks again!

[TomD8 · Accepted solution]

I agree that your son is a resident of MO for tax purposes, according to your scenario.  Therefore he must file two state tax returns: a non-resident KS tax return, and a resident MO tax return.

MO can tax ALL his income, regardless of where earned.  KS can tax the income he earns from work actually (physically) performed in KS.

He will be able to claim a credit on his MO return for the taxes paid to KS, so he won't be double-taxed.  If he uses TurboTax to file his returns, be sure he completes the non-resident KS return first, before the MO tax return.  This will allow the program to calculate and apply the credit correctly.

If he moves his permanent residence (his domicile in tax terminology) to SC next year, then for 2023 he will file a part-year resident return in both MO and SC.

Since he is (apparently) in KS on a temporary or transient basis, I do not believe he has to change his DL or vehicle licensure to KS.  Check the with KS DMV to be sure.

[videot7]

Thanks for your reply!  This makes the most sense to me.

Take care!