Have you relocated within the last year? If this is the case, it is critical to understand how your relocation may affect your taxes. While moving to another state is unlikely to have an impact on your federal taxes, it may have an impact on your state taxes.

If you haven’t moved but live in one state and work in another, you may still have additional tax ﬁling requirements.

Moving might have an effect on your state taxes, particularly if you relocate from one state to another. Because you must submit a tax return in the state in which you reside, residing in two states in a single year may necessitate ﬁling several tax returns. Relocating may have no effect on your federal tax ﬁling. With your new official address, you may still submit a single federal tax return.

Here, we’ll go through the most common worries individuals have if they’ve recently relocated to a new state, as well as what you should do about it.

When should I begin ﬁling my taxes?

Typically, the IRS begins taking tax returns in the early part of the year. On Friday, February 12, 2021, they began taking returns. While you don’t have to submit your taxes until April 15, you should start sooner if you expect a refund or have a complicated tax situation.

Where do I ﬁle taxes?

In most situations, you must submit a tax return in every state where you lived during the ﬁscal year. If you move to another state and make income throughout the year, you must ﬁle taxes in both your old and new states.

The Supreme Court declared in 2015 that two distinct states could not tax the same income. If you relocated out of state, the judgment means you won’t be liable to double taxation on your wages. However, you will still be required to ﬁle tax returns in each state and pay taxes on the part of your total income generated in each state.

Do I have to ﬁle taxes in two states even after moving?

If you relocate from one state to another throughout the year, you must typically submit a part-year resident tax return in each state.

Can I subtract my moving expenses?

Prior to 2018, people may deduct relocation expenditures if they relocated for a job and satisﬁed speciﬁc criteria. The Tax Cuts and Jobs Act of 2017 repealed the tax deduction, and only active-duty military members may now claim it. Other people will be able to deduct relocating expenditures for work purposes again beginning in 2026.

When I move, do I need to update my address with the IRS?

When you submit your ﬁrst federal tax return after moving, the IRS will automatically record your new address. However, if you relocate between tax ﬁling seasons, you should notify the IRS by completing an IRS address change form. This ensures that you receive any vital documents sent to you by the agency.

Many Americans, for example, will receive stimulus payouts in 2020 and 2021. For taxpayers who did not have direct deposit set up, the IRS sent the cheques to the address on ﬁle. You might not have gotten your check if you hadn’t changed your address with the IRS.

While you’re upgrading your IRS address, make sure to ﬁll out a USPS

change-of-address form and have your mail forwarded from your previous address.

When you relocate from one state to another, you might expect certain tax consequences. While you won’t have to pay extra taxes (unless you relocate to a state with a higher tax rate), you will have to ﬁle several tax returns. Each state requires its residents to submit a tax return every year, and individuals who relocate during the year must ﬁle a part-year resident report in each state.

Step-by-step instructions for ﬁling a part-year resident tax return:

Step 1: Figure out which states need you to ﬁle a tax return.

As a part-year resident, your tax burden is determined by the percentage of your income generated in each state. As a result, when you relocate, you must submit a tax return in both states.

Step 2: Determine how much you make in each state.

To submit your part-year resident tax returns, you must know not just your total yearly income, but also how much you made in each state.

Step 3: Calculate the proportion of your revenue that is earned in each state.

Determine what percentage of your overall revenue each section made up after you know how much money you received in each state. For example, suppose you earned

$100,000 in 2020. You made $40,000 in Alabama and $60,000 in California, your new home state. In Alabama, you would claim 40% of your income whereas in California, you would claim 60% of your income.

Step 4: Fill out the necessary tax forms in each state.

Because each state has its own tax forms, it’s critical to understand what documents each state demands from its part-time inhabitants. For assistance in locating the appropriate paperwork, contact the state agency in charge of tax collection, which is usually the Department of Revenue.