Author Topic: Living in multiple states (more than 2)  (Read 1788 times)

NoMoarWork

  • 5 O'Clock Shadow
  • *
  • Posts: 7
Living in multiple states (more than 2)
« on: September 16, 2015, 11:41:54 AM »
Hello,

I've found lots of info on living in 2 states, but very little on living in more than 2. For example, if I lived in State A, State B, and State C, what would be the bar for me to prove that State C is my home state (assuming State C has no income tax). A lot of the info out there says you need to live there more than half the year, but in this example, there are NO states I live in more than half the year.

Any resources (other than "go talk to a tax lawyer") or experience on this subject? Thanks!

GizmoTX

  • Handlebar Stache
  • *****
  • Posts: 1352
Re: Living in multiple states (more than 2)
« Reply #1 on: September 16, 2015, 11:57:47 AM »
Check the residency & tax laws for all 3 states. Some want you to pay income tax on everything you earn there. It makes a difference where you have your driver license & voter registration.

Axecleaver

  • Magnum Stache
  • ******
  • Posts: 3366
  • Location: New York
Re: Living in multiple states (more than 2)
« Reply #2 on: September 21, 2015, 01:29:12 PM »
Quote
what would be the bar for me to prove that State C is my home state (assuming State C has no income tax).

It depends on the state. Look for domicile rules and residency rules (some states differentiate) for each of the three. High tax states tend to be more aggressive with rules that define you as a resident. Here are NY's rules, for example:

http://www.tax.ny.gov/pit/file/pit_definitions.htm

Note that regardless of where you live, if you earn money in a state where you are physically present, you must pay state income tax on it. You have options for how you track this, but most folks use a metric where they record the number of days they were onsite in a particular state. You can record hours if you like.

For example: let's say you make 120k a year from a client in NY. Your permanent home is in Florida, which does not have state taxes. Of that 120k, 80k was earned while travelling to NY. 40k was earned while working remotely in Florida. You would owe NY taxes on 80k of your earnings.

joeh

  • 5 O'Clock Shadow
  • *
  • Posts: 35
  • Age: 32
  • Location: pdx!
Re: Living in multiple states (more than 2)
« Reply #3 on: September 26, 2015, 04:57:53 PM »
Somewhat related question.

By the end of the year I'll have "lived" in three states this year: New Mexico, Colorado, Oregon. But Colorado and Oregon will both be more temporary (possible Oregon is long-term). I earned W2 income in New Mexico and 1099 the rest of the year. The 1099 is for the same company I was previously w2 for. So it looks like this:

DatesLocationIncome Type
Jan - July 1New Mexicow2
July 1 - Oct 10(ish)Colorado1099
Oct 10(ish) - EndOregon1099

Will it be possible to pay just NM (for W2) and Colorado (for 1099) state taxes? I'd like to do this to make my taxes a smaller burden $-wise and time-wise.


Other Notes:

  • I have a LLC registered in Colorado but all my income is just checks written to my name.
  • In Colorado I was living with my mom (so no formal rental/housing agreement)
  • Still have NM license. Car is not registered in my name but insurance is (both in CO). I don't really drive...
  • I will sign rental agreement (prolly month-to-month) in Oregon. I'm moving into my friends apartment that I used to live in with him (few years ago).
  • But! I am not sure how long I'll be in Oregon (could be as little as 6 months), so I don't plan on getting license, etc. right away
« Last Edit: September 26, 2015, 05:02:54 PM by joeh »

Cathy

  • Handlebar Stache
  • *****
  • Posts: 1046
Re: Living in multiple states (more than 2)
« Reply #4 on: September 26, 2015, 07:57:23 PM »
There are no shortcuts here. Every state has its own laws. To determine which sates you may owe tax to, you need to read the laws of every state with which you have had any dealings and see whether that state's laws direct you to pay tax and if so, on what basis. Then, if you think that multiple states want you to pay tax on the same income, you may have to come up with a constitutional argument to avoid that result, perhaps based on the impermissible restraint of interstate commerce.

So, joeh, in your specific case, here is what you need to do:
  • Read the laws of New Mexico, Colorado, and Oregon;
  • Apply those laws to your specific facts; and
  • If you think that results in you paying too much tax, come up with a constitutional argument.

I'm not inclined to read the laws of three states and then apply those laws to your vague statement of facts. That would be a whole lot of work just to reply to your post, even in comparison to many of my posts here.

Here's the key thing to understand: every state has its own laws. There is no single test that applies to every state. In fact, even a state that you've never had any dealings with could have a law on the books saying you need to pay tax to that state on your worldwide income, and your only recourse would be a constitutional argument.