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Author: katiewa Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 123500  
Subject: Re: Tax impact of Changing State of Residence Date: 12/11/2012 11:30 AM
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Neither is a community property state, so your Federal wouldn't be any more complicated than today.

However, your state taxes might be a bit more complex. As a minimum, you'll be doing two sets of state taxes, each showing one full-year resident and one non-resident. And for the year you switch, you'll throw "part-year resident" into the mix.

With New Mexico and Idaho (my experience; both community property states), resident status makes a difference on some deductions and credits. Plus, New Mexico considers you a full-year resident (they claim all your income) if you are present for more than 185 days, while Idaho allows you to prorate your income (9-months' income to New Mexico, 3-months' income to Idaho), which results in 3 months of income being taxed by both states. And while both states allow some credit for the double tax, you still end up with a higher tax bill.

Best of luck--be sure to read the fine print on residency requirements for in-state tuition carefully!!

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