How to file taxes if you lived in two states

You may need to file two state returns.

Derek Silva

By

Derek Silva

Derek Silva

Personal Finance Expert

Derek is a personal finance editor at Policygenius in New York City, and an expert in taxes. He has been writing about estate planning, investing, and other personal finance topics since 2017. He especially loves using data to tell a story. His work has been covered by Yahoo Finance, MSN, Business Insider, and CNBC.

Published May 12, 2021|5 min read

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Dear Tax Genius,

I moved during the year because of the coronavirus pandemic but I continued working remotely for the same company. Do I still need to file taxes in my new home state even though I never actually worked there?

- Telecommuting Taxpayer

Dear Telecommuter,

The basic answer is that if you lived in multiple states during the year, you need to pay state tax in each of those states. The exact process depends on where you live since each state has its own tax laws, but you’ll probably file as a part-year resident for each state. You'll pay taxes according to how long you lived in each state and how much you earned while living there. As for your federal tax return, it may not be impacted at all.

When you live in one state but work in another, you usually need to file a regular return for the state in which you live and then a nonresident tax return for the state where you work. There are likely tax credits that prevent you from paying tax on the same income for multiple states, and some states have reciprocity agreements that allow you to skip filing in your work state altogether, but you should check with your individual state’s tax department for specific details.

Federal taxes if you lived in two states

Your federal income tax return probably won’t change much if you move during the year or work in multiple states. Include all of your taxable income on your federal return, regardless of the state you lived in or how you earned that income. If you’re married and file a joint return, make sure to include both spouses’ incomes. (Learn more about who should file jointly vs separately.)

What may change on your federal taxes is the complexity of claiming certain tax deductions or credits. For example, if you’re a self-employed worker who claims the home office deduction, changing offices during the year could make calculating your deduction more complicated. Also keep in mind that because of the 2017 Tax Cuts and Jobs Act, you can no longer deduct moving expenses on your federal return unless you’re an active-duty military member.

Related: 53 Deductions for and credits you can claim in 2021

Filing taxes if you moved during the year

If you live in multiple states during the year, you likely need to file a state income tax return in each state as a part-year resident. A part-year resident is someone whose permanent residence — primary home — was in-state for some of the year and out-of-state for some of the year. As a part-year resident, you have to pay income tax only for the income you earned while living in the state, so your tax return will require you to provide information on how long you lived in the state and the income you earned while living there.

The exact process of filing a part-year resident tax return varies by state. Depending where you live, the main tax form may be completely different or you may use the same tax form but have to add an additional schedule detailing your in-state income. Check with your state’s tax or revenue department for the correct tax forms.

Need help filing? Use one of this year’s best tax filing services.

Filing taxes if you work in another state

If you live in one state but work in another, you should file an income tax return with both states (unless they have a reciprocal agreement, as explained later). In the state where you live, you generally need to file the standard income tax form as a full-year resident. Report all of your income on that tax return, even if your income was earned while working in another state and even if the state where you work already taxed your income. For the state where you worked, file a nonresident tax return.

When you file your state returns, it’s important to know which states you already paid income tax to and how much you paid. (Check how much you paid by looking at the tax withholding information on your W-2 form or 1099 forms.) The state where you live will usually offer a tax credit so it isn’t taxing you on income that you’ve already paid tax on for your work state, and vice versa.

Note that working for a company that’s headquartered in a different state doesn’t necessarily affect your taxes.

Taxes for spouses who work in different states

The information above also applies if you’re married but your spouse works in another state. Spouses who work in different states may have a more complex tax return, but your filing status doesn’t change much in this case and you just need to make sure to keep track of how much income was earned in each state and how much tax was withheld for each state. One situation that could get more complicated is if you want to itemize deductions or qualify for certain deductions in multiple states. If you have questions, it’s best to work with a tax professional.

Taxes in states with a reciprocal agreement

If you work in a state that has a reciprocal or reciprocity agreement with the state where you live, you can file for an exemption so that you only need to file a tax return with the state in which you live (your resident state). Find the appropriate exemption form for the state in which you work, fill it out, and submit it to your employer so that they know which income taxes to withhold from your paychecks. You do not need to send the form to the state you work in or your resident state.

As an example, if you live in Ohio but work in Pennsylvania, you can get Pennsylvania tax form REV-419, fill it out, and submit it to your employer. Your employer will withhold payroll taxes only for Ohio and when tax season comes, you will only need to file an Ohio tax return.

It’s also common for reciprocal agreements to exist for spouses of military members and members of federally recognized Native American tribes.

States with reciprocal agreements

State where you workState where you liveExemption form
ArizonaCalifornia, Indiana, Oregon, VirginiaForm WEC
District of ColumbiaAny stateForm D-4A
IllinoisIowa, Kentucky, Michigan, WisconsinForm IL-W-5-NR
IndianaKentucky, Michigan, Ohio, Pennsylvania, WisconsinForm WH-47
IowaIllinoisForm 44-016
KentuckyIllinois, Indiana, Michigan, Ohio (some shareholder-employees excluded) , Virginia (must commute daily), West Virginia, WisconsinForm 42A809
MarylandDistrict of Columbia, Pennsylvania, Virginia, West VirginiaForm MW507
MichiganIllinois, Indiana, Kentucky, Minnesota, Ohio, WisconsinForm MI-W4
MinnesotaMichigan, North DakotaForm MWR
MontanaNorth DakotaForm MW-4
New JerseyPennsylvaniaForm NJ-165
North DakotaMinnesota, MontanaForm NDW-R
OhioIndiana, Kentucky, Michigan, Pennsylvania, West VirginiaForm IT 4
PennsylvaniaIndiana, Maryland, New Jersey, Ohio, Virginia, West VirginiaForm REV-419
VirginiaDistrict of Columbia (must commute daily), Kentucky (must commute daily), Maryland, Pennsylvania, West VirginiaForm VA-4
West VirginiaKentucky, Maryland, Ohio, Pennsylvania, VirginiaForm WV/IT-104
WisconsinIllinois, Indiana, Kentucky, MichiganForm W-220