Overview

Moving between states during the tax year can trigger filings in both your former and new state. Each state applies its own residency tests and sourcing rules, so you may owe tax where you lived and where you earned income. In my practice I’ve found that the three things that prevent most headaches are: (1) a clear move date, (2) pay‑period or client invoices that show when income was earned, and (3) timely coordination of withholding or estimated tax payments.

Step‑by‑step checklist

  • Determine residency status for each state. States treat people as full‑time residents, part‑year residents, or nonresidents; the rules vary. See state guidance and our explainer on How State Residency Is Determined for Part‑Year and Remote Workers.
  • Gather documentation: lease/mortgage closing, driver’s license change, USPS change‑of‑address confirmation, W‑2s/1099s, paystubs and invoice dates that show when income was earned.
  • Allocate income by period and source. Use paystubs, payroll reports, or client invoices to split wages and business income between the states where you were a resident or where the work was performed. Our guide on Filing for Part‑Year Residents: Allocating Income Between States covers common allocation methods.
  • Claim credits to avoid double taxation. Many states let residents claim a credit for taxes paid to another state on the same income. The credit rules and limits differ by state—read the state instructions closely.
  • Adjust withholding and estimated taxes. After you move, update your payroll withholding immediately. If you moved into a high‑tax state late in the year, you may need estimated payments to avoid underpayment penalties.
  • File the correct returns: full‑year resident (if applicable), part‑year resident, or nonresident return as required. Note filing deadlines and extensions for each state.
  • Keep records for at least three to seven years (state rules vary) in case a state requests proof of residency or income allocation.

Common situations explained

  • Move from a state with income tax to one without (e.g., New York → Florida): You’ll generally file a part‑year resident return in the taxed state for income earned there, and the no‑tax state typically requires no income tax return. See New York guidance (https://www.tax.ny.gov/) and Florida information (https://floridarevenue.com/).
  • Remote work spanning two states: Income sourcing can be based on where you performed the work, where the client/employer is located, or where you lived during the work period—rules differ by state. See our article on sourcing for remote work: Sourcing Rules for Multistate Income: Where to Report Remote Work.
  • Short residency in a high‑tax state: If you lived in a high‑tax state for part of the year, allocate only the income earned while you were a resident, but be vigilant about state reciprocity or allocation rules.

Practical examples

  • Example 1: You worked in State A from January–May, moved June 1 to State B, and worked remotely for the same employer through December. You will normally file a part‑year resident return in State A for January–May wages and a part‑year or resident return in State B for June–December wages. If State A taxes wages sourced to it after you moved, you may need to allocate accordingly.
  • Example 2: A client moved from New York to Florida in June. They filed a New York part‑year return reporting New York‑source income for January–May and did not owe Florida income tax (Florida has no individual income tax). This saved them tax compared with staying a New York resident.

Key mistakes to avoid

  • Not documenting the official move date (use lease closing, DMV change, or new job start date).
  • Failing to split income by residency period or by source—this leads to overpayment or double taxation.
  • Leaving withholding unchanged after a move—this causes underpayment or large refunds.
  • Ignoring state reciprocity agreements or credits that could lower your tax bill. See our piece on Avoiding Duplicate Filing Across State Returns: Coordination Tips.

State and federal resources (authoritative)

Quick professional tips

  • Ask payroll to run a wage allocation report if you changed states mid‑year—this makes preparing part‑year returns far easier.
  • If you receive a W‑2 showing full‑year wages in one state, request a corrected W‑2 or use paystubs to prove the period earned in each state.
  • Consider hiring a CPA with multistate experience when you have wage income from multiple states, rental income, or complicated business sourcing.

Short FAQ

  • Do I have to file in both states? If you were a resident or earned income sourced to a state during the tax year, yes—file as a part‑year resident or nonresident as required by that state.
  • How do I avoid being taxed twice? Most states allow a credit for tax paid to another state on the same income; follow each state’s instructions to claim it.

Professional disclaimer

This article is educational and does not substitute for personalized tax advice. For guidance tailored to your situation, consult a CPA or tax attorney familiar with multistate filings.

Last checked: 2025 — facts referenced here follow IRS and state guidance current as of 2025.