Author Topic: 401(k) implications of moving states mid-year  (Read 1098 times)

TWP21

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401(k) implications of moving states mid-year
« on: December 03, 2013, 10:00:13 AM »
Hi all,

Long time reader, first time poster. I have a non-straightforward question and would like the advice of the MMM community.

My company is relocating me from Washington (no state income tax) to Utah (5% flat state income tax) this coming July. I am planning to max out my 2014 contributions, but am wondering if I can avoid some additional tax by only contributing enough to get the company match in Washington, then increasing contributions while in Utah. Thoughts?

Details:
Months in WA: 6
Months in UT: 6
WA state tax: 0%
UT state tax: 5% (flat)
Company match: 100% match up to 6%
Salary: ~$70k

Thanks!

TLV

  • Bristles
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Re: 401(k) implications of moving states mid-year
« Reply #1 on: December 03, 2013, 03:58:18 PM »
I think that will work. 401k contributions are taken out "above the line" - the wages on your W2 are reduced by the amount taken out. As long as your employer gives you two W2s, one for work in WA and one for work in UT, and gets the 401k contributions right on each, it should work. It certainly can't hurt. Just make sure you file the extra form (TC-40B) for part-year UT residents.