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Filing Taxes in Two States

written by: randalarias•edited by: Laurie Patsalides•updated: 3/31/2009

Did you move to a new state and get a new job? Do you work out-of-state? Read this article to understand why you probably have to file state income taxes for two states.

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    When do I need to pay taxes in more than one state?

    There are four situations in which you will need to file taxes in more than one state. The first is if you generate income in two states, such as having two jobs or moving. The second circumstance is if you lived and worked in one state and then moved to another. Third, if you live in one state, such as Ohio, and work in another state, such as Kentucky. The last situation in which you will have to pay taxes to another state is if you own property that generates income in that state, such as rental property.

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    Do I always need to pay both states taxes?

    If you are a dependent working part time in another state, you may not have to file. This will most likely be the case for out-of-state college students.

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    What's the first step?

    Make sure you have all W-2s and income paperwork. Determine the percentage you earned total in each state, such as 20% income was earned in Florida and 80% was earned in Georgia. Also, know which state you were a resident of, or if you had partial residency in both states. This will help you with the paperwork for your state returns. Make sure you file your federal income tax return before attempting the state returns to clear up any potential problems with dependent status.

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    What about the forms?

    Some states have separate forms for filing taxes for part time residents and nonresidents, while other states combine part-year/nonresident forms. You can usually obtain the necessary tax forms from the state's Department of Revenue website.

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    Should I do my taxes myself or pay someone?

    If you are paying taxes to more than one state, it may be easier to pay someone to prepare your taxes. This will also decrease the likelihood of overlooking a particular state's laws or filing incorrectly. If you decide to do them yourself, the article "Filing Taxes in Two States" is very helpful.

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    Be Aware

    Remember that the same income may be taxed by two different states. Usually states have agreements with each other, allowing "a credit on dual-taxed income ("How")." To figure this credit you will need a separate form for the states you're filing in.

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    Resources

    "How to File Tax Returns in Two States." eHow. 31 March 2009. http://www.ehow.com/how_9717_file-tax-returns.html Byrd, Christy.

    "Filing Taxes in Two States." Associated Content. 14 February 2007. http://www.associatedcontent.com/article/141886/filing_taxes_in_two_states.html?cat=3