Dual State tax question

[NoOneGetsIt]

Hi I do my own taxes now that things are so simple but I do have a question that I could benefit by someone’s prior knowledge or advice.

We bought a house in Idaho this last year (May) but didn’t move in until September. We still own the house in Oregon as it is empty and on the market. I didn’t change our health insurance to Idaho until open enrollment in December which will start Jan 1.

I don’t know which state to claim and what month for tax purposes knowing the above. Should I claim 100% OR this year and just cut over clean to Idaho or use the date we got the moving truck?

I don’t work and neither does my husband so work doesn’t affect the decision. Still have OR license (yes we need to get!) but did change of address in September.

Appreciate any advice...I have been confused and stressing over this.
Thanks a ton!

 

[SecondCor521]

The Idaho tax instructions mention "If you (or your spouse) moved into or out of Idaho and were a resident for only part of the year, check box 4." when talking about the part year resident tax return (Form 43).

I'd use the date you drove the moving truck with your stuff in it across the border (probably at Ontario, OR).

P.S. - Welcome to Idaho! Don't tell any one else! ;-)

 

[MichaelB]

My guess is you will file in both states as part-year resident. Each will expect you to declare all the income you received while living in that state plus all the income sourced from that state during the entire year.

There are no hard rules regarding residency prerequisites or dates, it’s really up to you. The date you physically moved is a good choice, easily defensible.

You don’t work but you still have income. The type of income you have might influence your choice here.

 

[RE2Boys]

My guess is you will file in both states as part-year resident. Each will expect you to declare all the income you received while living in that state plus all the income sourced from that state during the entire year.

There are no hard rules regarding residency prerequisites or dates, it’s really up to you. The date you physically moved is a good choice, easily defensible.

You don’t work but you still have income. The type of income you have might influence your choice here.

+1
However, you may be in violation of Idaho law (just checked, within 90 days of establishing residency) in that most states have a certain time period where a new resident is to obtain an in-state driver's license and registration. And I hope you informed your insurance company of the permanent change in location of vehicles. https://www.dmv.org/id-idaho/new-to-idaho.php

The sale of your Oregon house would be considered Oregon sourced cap gains subject to Oregon income tax laws.

 

[SecondCor521]

+1
However, you may be in violation of Idaho law (just checked, within 90 days of establishing residency) in that most states have a certain time period where a new resident is to obtain an in-state driver's license and registration. And I hope you informed your insurance company of the permanent change in location of vehicles. https://www.dmv.org/id-idaho/new-to-idaho.php

I've never heard of that law being enforced after living in this state for over 40 years.

 

[Winemaker]

When I moved to West Virginia in 1981, all I did was change my address on my PA DL. When I returned to PA 10 years later, I did the reverse. Nobody ever complained, but then again, law enforcement in WV or PA never had a reason to stop to pull me over.

IIRC, I was taxed based on my residency based on where I lived on 12/31, as there is some reciprocating laws between PA and WV.

 

[pb4uski]

Hi I do my own taxes now that things are so simple but I do have a question that I could benefit by someone’s prior knowledge or advice.

We bought a house in Idaho this last year (May) but didn’t move in until September. We still own the house in Oregon as it is empty and on the market. I didn’t change our health insurance to Idaho until open enrollment in December which will start Jan 1.

I don’t know which state to claim and what month for tax purposes knowing the above. Should I claim 100% OR this year and just cut over clean to Idaho or use the date we got the moving truck?

I don’t work and neither does my husband so work doesn’t affect the decision. Still have OR license (yes we need to get!) but did change of address in September.

Appreciate any advice...I have been confused and stressing over this.
Thanks a ton!

Most likely you will have to file part-year returns for both states for your respective periods of residency. When did you change your drivers licenses? Homestead exemptions? Voting registrations? Car registrations? All of these and other factors wuld be relevant in determing when your domicile changed.

However, if it is a mixed bag and inconclusive, you might just file as a Oregon resident for 2018 and an Idaho resident for 2019. Otherwise, you could use the date you moved from the Oregon house into the Idaho house.

 

[corn18]

I'm in a similar boat. I got a job in TX and was living in OH. I am the sole breadwinner. Sequence of events:

1. 1 Oct 2018: Signed offer letter showing 1 Oct 2018 start date. Changed address with payroll to TX. Moved into company furnished executive apartment. Wife remained in OH house.
2. 3 Dec 2018: Purchased house in TX. Wife stayed in OH. I stayed in TX.
3. 6 Jan 2019: Household goods, wife, dog, 2 cats all moved to TX house. OH house put on the market. Auto insurance switched to TX. Permanent change of address to TX.
4. Today: OH house still on market. Living in TX house. Working on getting cars registered, driver's licenses and voter registration done.

OH tax is 4.99% marginal for me. TX has no state tax. I am going to file OH taxes through 30 Sep. My justification is that is when I stopped earning income in OH and started earning income in TX. That is also the date that I moved to TX. As others have stated, I could not find any hard rules written anywhere, so I am using my judgement to decide how to split the income.

 

[Brat]

Oregon income tax is much higher than Idaho's so much depends on how much of the year you feel you can reasonably allocate your Idaho residency. ASAP get Idaho driver's licenses as you will need driver's license info for ID purposes on all returns.

For those not in the know, Idaho has a sales tax but Oregon does not. That explains much of the difference in income tax rates.

 

[SecondCor521]

ASAP get Idaho driver's licenses as you will need driver's license info for ID purposes on all returns.

Huh? Yes, get an Idaho driver's license if you live here, but you don't need it for tax returns.

 

[Texas Proud]

I've never heard of that law being enforced after living in this state for over 40 years.

Get stopped by a cop and when he asks is this your residence and you say no... and then he asks how long you have been living at your new address and you say over 90 days... and then watch as he write you out a ticket...


Otherwise you are probably good without doing it...

 

[SecondCor521]

Get stopped by a cop and when he asks is this your residence and you say no... and then he asks how long you have been living at your new address and you say over 90 days... and then watch as he write you out a ticket...

Otherwise you are probably good without doing it...

I've been stopped by cops in Idaho a number of times and they have never asked if the address on my license is my residence. I've also been stopped by cops in other states and similarly never been asked that kind of question.

Usually they ask "Did you know how fast you were going?" ;-)

Although, now that I think about it, my car and license and registration are all Idaho and all point to the same address. Maybe they'd ask if there were some sort of illogical mismatch.

You're also supposed to change your driver's license if you change addresses within the state. Nobody does because it's a 2 hour ordeal at the DMV and there may even be a fee. Also never heard of anyone getting cited for that.

 

[Brat]

Huh? Yes, get an Idaho driver's license if you live here, but you don't need it for tax returns.

It is one of the forms of ID required if you file online.

 

[SecondCor521]

It is one of the forms of ID required if you file online.

Ah, thank you. I usually mail in paper returns where it doesn't seem to be needed.

 

[Bir48die]

Oregon income tax is much higher than Idaho's so much depends on how much of the year you feel you can reasonably allocate your Idaho residency. ASAP get Idaho driver's licenses as you will need driver's license info for ID purposes on all returns.

For those not in the know, Idaho has a sales tax but Oregon does not. That explains much of the difference in income tax rates.

If you're not going to lie to the IRS your state of residency was Oregon for this year. That will change next year.

 

[Bir48die]

However will have to fill out a pertain year return for both states

 

[pb4uski]

If you're not going to lie to the IRS your state of residency was Oregon for this year. That will change next year.

Naive response there Bir48die.... the IRS doesn't give a rat's tail what state you reside in since your state of residency doesn't impact your federal income tax obligation.

Given OP's facts and circumstances they could probably justify 3/4 OR/1/4 ID or all of 2019 as OR resident.... gray area.

 

[Bir48die]

For Feds it doesn't matter. For state you have to pick a state that was your main domicile for the year. He has one state with income taxes, one without. For the 2018 tax year Oregon was his main state of domicile but will do a return for Oregon to claim or pay his taxes. There is no need to do Idaho since they are not an income taxed based state. Software will allow you to breakout % in Oregon.

I agree about the Feds and might have misread his original post. Also was late at night after a beer or two. I do 100 tax returns every year so I'm not totally misinformed. Thanks for the correction.

 

[SecondCor521]

For Feds it doesn't matter. For state you have to pick a state that was your main domicile for the year. He has one state with income taxes, one without. For the 2018 tax year Oregon was his main state of domicile but will do a return for Oregon to claim or pay his taxes. There is no need to do Idaho since they are not an income taxed based state. Software will allow you to breakout % in Oregon.

I agree about the Feds and might have misread his original post. Also was late at night after a beer or two. I do 100 tax returns every year so I'm not totally misinformed. Thanks for the correction.

Uh, no.

Both Oregon and Idaho have part-year resident tax returns. For Oregon it is Form OR-40-P and for Idaho it is Form 43. The OP should file a single Federal return, and file both OR-40-P and Form 43 with the respective states, allocating income tax items between the two as appropriate.

Idaho certainly does have an income tax. It is a progressive income tax topping out at 6.925% of taxable income.

 

[pb4uski]

^^^ maybe it was more than two beers... or they were really high ABV.

 

[SecondCor521]

^^^ maybe it was more than two beers... or they were really high ABV.

I hope for the 100 people that the beers and the tax prep occur at distinct times.

 

[Bir48die]

No, I smoke weed when I do the returns.

 

[MichaelB]

Uh, no.

Both Oregon and Idaho have part-year resident tax returns. For Oregon it is Form OR-40-P and for Idaho it is Form 43. The OP should file a single Federal return, and file both OR-40-P and Form 43 with the respective states, allocating income tax items between the two as appropriate.

Idaho certainly does have an income tax. It is a progressive income tax topping out at 6.925% of taxable income.

I agree.

There is no obligation to become a state resident. Unless one wants to vote, get a drivers permit, have health insurance, open a brokerage account, etc.

 

[Bamaman]

Had a friend living in Florida for 1/2 the year plus one day--documented. He lived in Tennessee the other half of the year minus one day. He had Florida license plates and driver's license, and claimed to be a Floridian--or state tax purposes in Tennessee. Because he had a large fast food restaurant out of state, he would have to have paid 5% Tennessee State Income Tax on the income. Come to find out, many of the wealthiest Tennessee citizens with non-Tennessee incomes have homes in Florida for tax purposes.

 

[pb4uski]

This is a common issue. I worked with a partner who lived in Dallas but spent a lot of time working in NYC and had an apartment in NYC.... he kept meticulous records of his travel and where he slept each night so NYS/NYC didn't get to claim that he was a NY resident and therefore subject to NY income taxes.