Taxes the Year You Move to a New State: Part-Year Residency Explained
In the year you move, two states can claim part of your income. Knowing how part-year residency works helps you file correctly and avoid paying tax twice on the same dollars.
Your federal return doesn't change
You file one federal return as usual. Moving only affects your state returns. Moving expenses are generally not deductible on federal returns, except for active-duty members of the Armed Forces moving under military orders and, from 2026, certain intelligence-community employees. Some states, such as California and New York, still allow the deduction.
Part-year resident returns
If both your old and new states have an income tax, you'll usually file a part-year resident return in each:
- Your old state taxes income you earned while you lived there (plus income from sources in that state afterward, such as rent from a property you kept).
- Your new state taxes income you earned after you became a resident.
Many states calculate tax as if all your income were theirs, then multiply by the share earned while you were a resident. This keeps you in the right bracket but only taxes the resident portion.
Moving to or from a no-income-tax state
If you move from Texas to California, you file only a California part-year return for the months after the move. If you move from California to Texas, you file a California part-year return for the months before. States with high taxes review these returns closely, so keep proof of your move date.
When exactly did you become a resident?
States look at where you are "domiciled", meaning your permanent home, and how many days you spend there. Evidence includes:
- the date your lease started or your home purchase closed,
- your new driver license and vehicle registration dates,
- voter registration,
- where your family, doctors and bank accounts are,
- the date you sold or stopped using your old home.
Some states treat you as a full-year resident if you keep a home there and spend more than a set number of days (often 183) in the state. Cutting ties clearly matters if you're leaving a high-tax state.
Avoiding double tax
Income can be taxed by two states when, for example, you earn a bonus in the new state for work done in the old one, or you commute across a state line. Most states give residents a credit for income tax paid to another state on the same income. Some neighboring states go further with reciprocity agreements, so commuters pay only their home state. See live in one state, work in another.
Things that trip people up
- Payroll not updated: if your employer kept withholding for your old state, you'll need to claim a refund there and may owe the new state.
- Deferred pay: bonuses, stock vesting and severance can be sourced to the state where you earned them.
- Selling your old home: gains are usually taxed by the state where the property is.
- Remote work for an out-of-state employer: a few states tax remote employees of in-state employers under a "convenience of the employer" rule; see keeping a remote job below.
Keeping a remote job with an employer in your old state
Wages are normally taxed by the state where you do the work. New York, Pennsylvania, Delaware and Nebraska are exceptions: under a "convenience of the employer" rule, they tax a nonresident who works from home for an employer based in the state as if the work were done at the office. The rule does not apply when your employer requires you to work outside the state.
- New York: days you work from home for a New York employer count as New York workdays. The rule is still in force for 2026; New York's Tax Appeals Tribunal upheld it again in 2025.
- Pennsylvania: days you work from home for a Pennsylvania employer count as Pennsylvania workdays. Its reciprocity agreements still cover the wages of residents of Indiana, Maryland, New Jersey, Ohio, Virginia and West Virginia.
- Delaware: days you work from home for a Delaware employer count as Delaware workdays.
- Nebraska: since 2025 the rule applies only if you also work in Nebraska on more than seven days in the year (LB 1023). Employers withhold Nebraska tax only on days worked in Nebraska, so any remaining Nebraska tax is settled on your nonresident return.
Connecticut and New Jersey have a matching rule that applies only to residents of states with their own convenience rule, and Oregon's covers only nonresident managers of Oregon employers.
If one of these states taxes your remote wages, your new home state usually gives a credit for income tax paid to another state, so you pay about the higher of the two states' tax rather than both. Credit rules differ by state and may not cover every such case, so check your new state's instructions for the credit before you rely on it.
Records to keep
Keep your moving receipts, closing or lease documents, the dates on your new license and registration, and final pay stubs from before and after the move. They make the part-year returns easy and protect you in an audit.
This guide explains general rules. Each state's part-year return has its own instructions; check your state revenue department or a tax professional.