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Snowbirds And State Taxes
It’s not uncommon for older homeowners in colder climates to also own property in the Sun Belt. Snowbirds, for instance, may own homes in northern and southern states, and may even earn income in both places. Unfortunately, this can complicate their tax picture.
Income Tax
Let’s say you live and work in the North most of the year, but relocate to a warmer climate during the winter and rent out that home the rest of the year. You’ll need to file a resident state tax return in your primary state and a non-resident tax return in the other state. This is generally the drill in any two states where you have income.
Most states have reciprocal tax agreements, so you won’t pay double the taxes. What you pay in the higher-taxed state is generally credited to you in the other state. In your resident state, you’ll need to include all income, wherever it is earned. Generally, your non-resident tax return requires only income earned in that state.
Death Tax
With many states also having estate and inheritance taxes, owning property in two states presents additional challenges. So, talk to professionals who understand the nuances of multi-state estates.
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To learn more about Katz Viola Lebenhart & Mauro, LLP,
visit www.kvlmcpa.com.
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