Expat back in US: taxes in one or multiple states? (NJ, OH)

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Expat back in US: taxes in one or multiple states? (NJ, OH)

Postby northernisland » Sun Jan 27, 2013 1:12 am

I've been abroad several years and have returned for half a year. In late June we arrived in the midwest. I spent about 6 weeks in OH (where I got a driver's license because my NJ was expired an couldn't be renewed). In August and early September we traveled. In late-September we arrived in NJ where we spent most of the fall/winter. My employing organization (which won't give tax advice) asks us all to pick a state of residence for when we return and they've been deducting NJ state taxes for us since late June.

Should I just be (1) filing NJ taxes covering the period from June on [when payroll deduction began], (2) be filing in NJ from our date of arrival in September, or (3) do I also need to file in OH? We don't have a high income (~$50,000) and do have several kids, so I don't anticipate taxes being much either way. When we were abroad, Ohio asked for a copy of federal returns (which showed we were foreign residents; we often use a mailing address with parents in OH when we are abroad).

Thank you all for your help! You've been a huge help on getting started on similar challenges.
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Re: Expat back in US: taxes in one or multiple states? (NJ,

Postby JamesSFO » Sun Jan 27, 2013 1:20 am

I would be inclined to file both returns with NJ as your residence but also file for OH up until you moved. Likely it will balance itself out on NJ and while being a bit of extra paperwork will keep everything above board.
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Re: Expat back in US: taxes in one or multiple states? (NJ,

Postby sscritic » Sun Jan 27, 2013 1:32 am

I tend to read instructions. Read the instructions for NJ and Ohio. Most likely you are a part year resident of each. I think you will have to determine what "traveling" means. You were being paid while you traveled if I understand correctly, but you don't really want to be a part-year resident of 13 different states. Since you hadn't arrived in NJ, I would guess that you were a resident of Ohio for that time, but I wouldn't know without reading the rules. Hint: I am not going to. That's your job.
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Re: Expat back in US: taxes in one or multiple states? (NJ,

Postby bpp » Sun Jan 27, 2013 4:43 am

Where were you living before you went abroad? You might want to make sure that after return, you declare at least temporary residence in a different state from that one. Some states will try to claim you were really a resident of that state the whole time you were abroad, and demand back-taxes, if you move back to the same state after living abroad. No idea what NJ and OH say in this regard, but something to watch out for.
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Re: Expat back in US: taxes in one or multiple states? (NJ,

Postby northernisland » Sun Jan 27, 2013 3:32 pm

Thanks sscritic. You always crack me up. No one expects you to do the searching for them. Often, however, I see cases here where someone has encountered a similar or identical situation and can point me to resources I wouldn't find easily on my own.

I did do some searching and couldn't find a minimum threshhold for residency. The instructions for Ohio say if you are part year then you pay part year taxes, but the 13 states examples is illustrative. We also spent at least a week in each of three other midwestern cities and a month with relatives in the south and a week on the east coast, all before getting to NJ in the fall. I think I will just pay NJ tax like we were in NJ the whole time. None of the income is from OH or NJ. We need to be paying taxes to someone, however, so it may as well be NJ.

I do wonder what expats do if they return to the US and travel continuously. BPP--because we were abroad and met the requirements while abroad and our income fell under the foreign income exclusion limit, we didn't have to pay state tax while abroad (something another boglehead helped me with a while back).
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Re: Expat back in US: taxes in one or multiple states? (NJ,

Postby sscritic » Sun Jan 27, 2013 4:15 pm

We collectively just did this earlier today with Iowa and Arizona. There are no hard and fast rules, but intent seems to be the key. Intent is indicted by things like registering a car, getting a driver's license, voting, paying utility bills, etc.

Let me give OH a shot (or rather let me give google a shot at OH):
(I) “Resident” means any of the following, provided that division (I)(3) of this section applies only to taxable years of a trust beginning in 2002 or thereafter:
(1) An individual who is domiciled in this state, subject to section 5747.24 of the Revised Code;
...
(J) “Nonresident” means an individual or estate that is not a resident. An individual who is a resident for only part of a taxable year is a nonresident for the remainder of that taxable year.
http://codes.ohio.gov/orc/5747.01

Now if we only knew what domiciled means, but we are told where to look: section 5747.24 Presumption of domicile
http://codes.ohio.gov/orc/5747.24

You can read it, but it basically presumes you are a resident of Ohio unless you can meet a five part test. This is the anti-snowbird test to make people spending the winter in Florida residents of Ohio for tax purposes.

If you are unsure of your state of residency, Ohio law provides that you will be considered a full-year nonresident of Ohio only if you meet all five of the following requirements:
During the entire taxable year you had at least one abode outside of Ohio,
You spent no more than 182 contact periods in Ohio during the taxable year,
You were not a part-year resident of Ohio during the taxable year,
By May 31 of the immediately succeeding calendar year you file, as appropriate, either the affidavit or notice of non-Ohio domicile or notice of no Ohio income tax liability (below),
These documents do NOT contain any false statements.
http://www.tax.ohio.gov/ohio_individual ... tatus.aspx
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Re: Expat back in US: taxes in one or multiple states? (NJ,

Postby HueyLD » Sun Jan 27, 2013 5:25 pm

northernisland wrote:I've been abroad several years and have returned for half a year. In late June we arrived in the midwest. I spent about 6 weeks in OH (where I got a driver's license because my NJ was expired an couldn't be renewed).

There is a very important point. I think you are considered an OH resident because that's the only state that you have acquired a current DL.

There are various professions where one travels around the country and spends a few months in a state before moving to the next state. A travelling nurse may fit that category. She normally files multiple state returns with one home state (typically the state that issued her driver's lic.) and the rest non-resident states. She can get "other state" taxes paid" credit on her home state for any double taxation at the state level.

So, if NJ is truly your home state now, you need to go thru the process of changing your driver's lic., auto registration, voter registration, etc. to prove your intent. Since many states are broke nowadays, you should be careful and follow the rules so that you don't become a resident of more than one state.
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Re: Expat back in US: taxes in one or multiple states? (NJ,

Postby Epsilon Delta » Sun Jan 27, 2013 10:12 pm

sscritic wrote:You can read it, but it basically presumes you are a resident of Ohio unless you can meet a five part test. This is the anti-snowbird test to make people spending the winter in Florida residents of Ohio for tax purposes.

If you are unsure of your state of residency, Ohio law provides that you will be considered a full-year nonresident of Ohio only if you meet all five of the following requirements:
During the entire taxable year you had at least one abode outside of Ohio,
You spent no more than 182 contact periods in Ohio during the taxable year,
You were not a part-year resident of Ohio during the taxable year,
By May 31 of the immediately succeeding calendar year you file, as appropriate, either the affidavit or notice of non-Ohio domicile or notice of no Ohio income tax liability (below),
These documents do NOT contain any false statements.
http://www.tax.ohio.gov/ohio_individual ... tatus.aspx


A fine piece of drafting.

Notice how this makes somebody unsure if they live in Georgia or Tennessee* a resident of Ohio unless they file that affidavit. Heck it probably makes some bona fide residents of Washington, who aren't sure of anything after initiative 502, residents of Ohio.

* http://www.tba.org/journal/crossing-the-line
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Re: Expat back in US: taxes in one or multiple states? (NJ,

Postby northernisland » Mon Jan 28, 2013 12:27 am

Epsilon Data, that is really funny! I hope everyone who is not a resident of Ohio remembers to file their affadavit, otherwise they will fail the five point test and have to pay OH taxes.

I think we will be okay just filing NJ. I spent less than 60 days there and spouse never changed driver's license from NJ. Spouse also has class credits at a school in NJ and our only signed lease this year is in NJ. We've also had NJ taxes being deducted from day one back in the States, so that may help with intent. Our only big challenges with OH is that we've used parents' address for Vanguard and the driver's license. I think worse case scenario is sending a copy of federal and NJ taxes to OH. I do wonder how many people fill out the affadavit. I probably won't even fill it out, because I can only see it drawing attention to our existence.
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