What Does a Resident Income Tax Return Mean?

A resident income tax return is a form filed with a state’s revenue agency by an individual who qualifies as a resident for the entire year. This is distinct from the federal return submitted to the IRS. Filing as a resident determines the scope of income subject to that state’s laws, which dictates the form you use and the income you must report.

Determining Your Tax Residency Status

State tax agencies primarily use two concepts to determine if an individual is a resident for income tax purposes: domicile and statutory residency. Domicile is the place of your true, fixed, and permanent home; it is the location you intend to return to after any period of absence. You can have multiple residences, but only one domicile.

State revenue departments look at the entirety of your connections to determine your domicile. Factors that help establish your domicile include:

• Where you are registered to vote
• Where you hold a driver’s license
• Your primary banking relationships
• The location of your family and social connections
• The location of personal property like vehicles or furniture

Separate from domicile, states apply a more objective test known as statutory residency, often called the 183-day rule. Under this principle, an individual who spends more than 183 days of the tax year in a state can be classified as a resident for that year, even if their domicile is in another state. This rule also requires that the individual maintained a permanent place of abode, such as a house or apartment, in that state. Any part of a day spent in the state counts as a full day.

An individual can be domiciled in one state but also meet the statutory residency requirements of another, creating a dual-residency situation. In such cases, tax laws often include tie-breaker rules to determine which state has the primary taxing right.

Taxable Income for a Resident

The primary implication of being a state resident is the scope of income that must be reported. Residents are taxed on their “worldwide income,” which includes all income earned from every source, regardless of where that income was generated.

For example, if you are a resident of one state but commute to a job in a neighboring state, your wages from that out-of-state job are taxable in your home state. This principle extends to rental income from a property in another state and investment income, such as interest, dividends, or capital gains.

To prevent the same income from being taxed by two different states, resident tax laws provide a credit for taxes paid to another state. When a resident earns income in another state and pays tax there, they can claim this credit on their resident return to reduce their home state’s tax liability.

The credit is limited to the amount of tax the home state would have charged on that same income. Claiming this credit requires documentation of the income earned and the taxes paid to the other jurisdiction.

Contrasting Resident, Nonresident, and Part-Year Resident Returns

Understanding the resident return is clearer when compared to the other state filing statuses: nonresident and part-year resident. Each status applies to different circumstances and results in a different calculation of taxable income.

A nonresident return is filed by individuals who do not live in a state but earn income from sources within it. For example, someone living in one state who owns a rental property in another would file a nonresident return in the state where the property is located. Nonresidents are only taxed on the income sourced directly from that specific state, not on their worldwide income.

A part-year resident return is for individuals who move from one state to another during the tax year. For the portion of the year the person lived in the state, they are taxed as a resident on all income from all sources. For the portion of the year they lived elsewhere, they are taxed as a nonresident, reporting only the income earned from sources within that state.

Information and Forms for Filing a Resident Return

To complete a resident tax return, you must gather several documents. The starting point is your completed federal tax return, as many state forms use the federal adjusted gross income as a baseline. You will also need all income-reporting documents, such as Form W-2 and various Form 1099s. If you are claiming a credit for taxes paid to another state, a copy of that state’s completed tax return is required as proof.

Each state has its own specific form for resident income taxes, which can be found on the website of the state’s department of revenue or taxation. While names vary, they are often clearly designated, such as California’s Form 540 or New York’s Form IT-201. You must download the correct form for the specific tax year and ensure it is the resident version.

With the necessary documents and the correct state form, you can begin entering your information. The form will require transcribing the federal adjusted gross income and then making state-specific adjustments. A separate schedule or section on the return is used to calculate the credit for taxes paid to another state.

The Filing Process

Once the resident tax return is completed, the final step is submission. Most states encourage electronic filing through the state’s official tax portal or by using approved commercial tax preparation software. E-filing is the fastest method and provides an immediate confirmation that the return has been received.

For those who file by mail, the correct mailing address can be found in the instructions for the specific tax form. States often have different P.O. boxes for returns that include a payment versus those that are claiming a refund. When mailing, it is advisable to use a service that provides tracking to confirm delivery.

After the return is submitted, you can track the status of your refund through a dedicated tool on the state’s revenue department website. If taxes are owed, the payment can be made electronically at the time of filing or mailed separately with a payment voucher. The form instructions provide specific details on how to make payments.