State Tax Return

Have a question about your personal investments? No matter how simple or complex, you can ask it here.
Post Reply
August
Posts: 64
Joined: Wed Dec 04, 2013 9:03 pm

State Tax Return

Post by August » Sat Nov 19, 2016 12:58 pm

I need some help with a tax situation. Not looking for any legal advice, just more of a wwyd.

First some back ground information. From 2010-2015, I had a job that required frequent and long travel (up to 30 days at a time, 270+ days a year). I was in my mid 20s and was single. From 2010-January 1, 2013, I lived with my parents (to save money) in State A. At the end of 2012, I received an offer to transfer to State B, a location I was quite fond of. I had a bit of flexibility in moving dates (anytime over a three month period) and ironically enough thought it would be easiest to make the switch at the end of the year to avoid multiple state tax filings. I got an apartment beginning Jan 2, 2013 (the 1st is a holiday) in State B and by the end of January 2013, had updated my drivers license, car registration, and professional licenses to state B and I thought all the legal addresses of my financial accounts. Due to the long term and frequent traveling, I left the mailing address for my accounts at my parents house in State A. I didn't want financial information that may require immediate attention unattended while I was traveling for work. At no time did my work traveling take me back to state A after I moved. My only time back there has been holidays visiting my family.

Just this past week, I received a call from my parents that state A has sent a letter of tax enforcement stating I owe money from dividend and stock sales/transfers for 2013. I filed both federal and state (B) tax returns for 2013 reporting my w-2 and investment income. If it matters, state B has a higher state tax than state A.In addition, my w-2 shows all income for 2013 as reportable to state B. It is only investment income that State A is wanting to collect. I plan to call state A on Monday to find out what they need from me.

My question is, can I make a case for state residency in state B for the year if I used my parents address in State A as a mailing address for important financial mailings? Will I need to refile my 2013 taxes with States A and B, changing the income from State B or A? Will I owe taxes to both states?

gclancer
Posts: 429
Joined: Sat Apr 27, 2013 10:34 am

Re: State Tax Return

Post by gclancer » Sat Nov 19, 2016 1:37 pm

I think you can make the case that you were domiciled in State B and don't owe tax to State A. Google "[State A] domicile" and you should be able to find the factors used the the analysis. You could also read the instructions for State A's income tax return which probably addresses whether someone is a full year/part year/nonresident taxpayer.

User avatar
Coyote
Posts: 46
Joined: Sat Sep 13, 2014 11:28 pm

Re: State Tax Return

Post by Coyote » Sat Nov 19, 2016 1:48 pm

Send State A a copy of your State B tax return, and a letter stating that you were in residence in State B as of Jan 2, 2013. Add that the 1099's, etc were sent to your parents address during tax season as you hadn't changed your address with everyone for fear of missing them. That should be enough.

Katietsu
Posts: 849
Joined: Sun Sep 22, 2013 1:48 am

Re: State Tax Return

Post by Katietsu » Sat Nov 19, 2016 2:54 pm

Personally, I would not bother to call. You were clearly a resident of state B and owe nothing to state A.

Write a letter to state A letting them know that as Jan. 2 you were a resident of state B. Send a copy of your return for State B. Allow 6 weeks to pass. Then, if you have not heard anything, call to make sure the situation is resolved.

User avatar
celia
Posts: 7105
Joined: Sun Mar 09, 2008 6:32 am
Location: SoCal

Re: State Tax Return

Post by celia » Sat Nov 19, 2016 3:33 pm

Even if state A wants a tax return for 2013, if the taxes for state B are greater, most states agree that your total state taxes can't be more than what the larger state tax is.

I wouldn't ignore this as someone suggests, as the same thing can happen for later tax returns. You want state A to know you have no relationship with them as of Jan 2013.

fabdog
Posts: 192
Joined: Wed Jan 16, 2013 1:59 pm
Location: Williamsburg VA

Re: State Tax Return

Post by fabdog » Sat Nov 19, 2016 3:54 pm

Agree that you should send them a letter stating resident of State B. That way it gets resolved, don't ignore. While on an overseas assignment, my company did my taxes. They were located in CA, we were NM residents. They filed the returns with a CA address so all correspondence came to them.

Sure enough, California sent a letter asking for taxes... a nice letter explaining the situation and copies of the federal and state returns solved the issue, and we didn't have it in any future years

Mike

August
Posts: 64
Joined: Wed Dec 04, 2013 9:03 pm

Re: State Tax Return

Post by August » Sun Nov 20, 2016 7:32 pm

Thanks everyone for the advice. I don't want to ignore the letter. I think I'm going to respond to the letter by saying I was not a resident for 2013 (and beyond) and see what they say. The funny part is that since they sent the letter to my old address, had it not been my parents house, I never would have known state A send the letter since mail forwarding stops after 1 year.

I officially changed my mailing address the middle of last year when I got a new non traveling job and bought a house here, so I am concerned this will happen again for 2014 and 2015.

Thanks!

Post Reply