UAL Bagsmasher
Topic Author
Posts: 1839
Joined: Wed Sep 08, 1999 12:52 pm

Income Tax Question

Fri Aug 12, 2005 10:17 pm

I have a question for all you accountant types on this forum. Here is the scenario:


I currently reside and work in State 'A.' (I have for all of 2005.) In October, I will be moving to and living in State 'B.' While living in State 'B', I will be working in State 'C.' Now the question. Come Spring of 2006, how do I file my taxes? Thanks in advance.
 
halls120
Posts: 8724
Joined: Sun Jun 05, 2005 3:24 am

RE: Income Tax Question

Fri Aug 12, 2005 10:42 pm

Quoting UAL Bagsmasher (Thread starter):
I have a question for all you accountant types on this forum. Here is the scenario:


I currently reside and work in State 'A.' (I have for all of 2005.) In October, I will be moving to and living in State 'B.' While living in State 'B', I will be working in State 'C.' Now the question. Come Spring of 2006, how do I file my taxes? Thanks in advance.

With the assistance of several good glasses of beer.... Wink

I'm not an accountant, but have been faced with a similar scenario in the past.

Depends on the states involved, but in general, you will file your state taxes as a resident in State B (and pay taxes there only on the income earned while a resident), since that is where you will be domiciled. You will likely pay taxes to State A for the period you lived there (and have to file a non resident return in State A). What really screws things up is State C. If they decide to tax you, then you'll have to file a nonresident return and pay taxes there for the time you worked there. You should, however, be able to receive either total or partial credit in State B for the taxes you paid to State C.

In other word, you might want to seek the services of a good accountant. I file my own returns using TaxCut software, but I'm not sure this software could handle your situation.
"Suppose you were an idiot. And suppose you were a member of Congress. But I repeat myself." Mark Twain, a Biography
 
spinzels
Posts: 332
Joined: Fri Jun 04, 2004 11:00 pm

RE: Income Tax Question

Fri Aug 12, 2005 11:50 pm

Halls120 is exactly right.

My situation was identical to yours UAL_bagsmasher:

In the year 1999, I was in PA from 1/1 to 4/1, when I moved to the City of New York, but was working for a NJ-based employer (i.e., paid withholding taxes in NJ).

So in April 2000, I filed the following returns:

(1) A PA resident return covering the period 1/1 to 4/1;
(2) A NJ non-resident return for the period 4/1 to 12/31;
(3) A NY resident return for the period 4/1 to 12/31.

(All of the income taxes I paid to NJ, I was allowed to credit against the taxes I owed to NY)

Your situation may vary depending on the laws of states A, B, and C. However, please be careful of one thing: typically you will pay no taxes in state B as you earn your taxed income (because your employer only withholds for state C); so state B may require you to pay an estimated tax on your income as you earn it, and may assess a penalty on you if you do not.

BTW: I know from another thread that your state C is PA. If your state B is NJ, then life is going to be fine, NJ/PA have a terrific reciprocity agreement; log on to their revenue department web pages and read more…but do it now!
I've been to Paradise, but I've never been to me
 
UAL Bagsmasher
Topic Author
Posts: 1839
Joined: Wed Sep 08, 1999 12:52 pm

RE: Income Tax Question

Tue Aug 16, 2005 12:09 am

State "B" is going to be Delaware. I don't know what kind of agreement they have with PA.

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