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Part-Year Resident or Nonresident for State Tax Purposes

Residency rules vary by state

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A part-year resident is usually someone who has moved into a state in the middle of a tax year while a nonresident has not physically lived in the state.  But, as with all things in tax, there are caveats to this general rule of thumb.

Temporary Moves

If your move was simply temporary and you did not make any actions that created residency, like registering to vote or getting a license, you may be a nonresident.  To be a nonresident you must not move into the state with the intention of making it your permanent residence.

One example of how this may happen would be if you temporarily moved into a new state for a short-term project, then subsequently returned to your home state at the end of the project. 

In some states, you will automatically be considered a resident if you have lived in a state for a certain amount of time.  Some states may also require that you maintain a permanent home in another state as well.

Whether you are a nonresident or party-year resident, most states require that you pay taxes on any income you made from sources within that state.  However, special rules apply to military servicemembers.

Members of the Military

Special tax relief legislation was passed in 2009 that relieved members of the military and their spouses from paying taxes in multiple states.  Under the Military Spouses Residency Relief Act, the military member and their spouse will only be responsible for state and local taxes in their home state where they maintain residency.  This tax relief legislation applies only if the family moved because of military service-related orders.

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