Part Year Resident – Taxation in 2 states?

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  • #5116
    Blondie65
    Participant

    I live in Virginia now, but I will retire in a few months and move to New York state.

    I understand this will make me a part-year resident of both states in 2020.

    I will have both earned and investment (interest, dividends, etc.) income during my time in Virginia, but only investment-related income (interest, dividends,etc.) during the remainder of the year in New York.

    I can find the filing instructions for both states, so that is not in question. It appears New York state will impose an income tax on my retirement income > $20K, but my question is will they impose income tax for the earned income I had while living in Virginia during the first months of 2020?

    I am trying to understand, get a handle on the big picture of how the move will impact my overall tax situation. If anyone can comment, I appreciate that, thank you.

    #5118
    Kaye Thomas
    Moderator

    Part-year state returns are complicated. One of my partners said he told clients they could move only on January 1.

    The general rule is that earned income is taxed only in the state where it was earned. However, the a state may take into account your overall income, including income sourced in another state, in determining the tax rates that apply to the income being taxed by that state. NY will not tax your earned income from before the move, but that income may cause you to pay more tax on the retirement income you receive after the move.

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