Business & Finance Taxes

What Determines the State You Pay Taxes In?

    Residency

    • The Minnesota Revenue department reports taxes are usually paid in the state of permanent residency. This is defined by factors including the location of the home permanently lived in, the state of issue for a driver's license and where vehicles are registered.

    Non Resident

    • A person may be classed as a non-resident but still be liable to pay income taxes in a state if they lived and worked in a state for a temporary period. Taxes are paid on rental properties, earned income and as a beneficiary of an estate.

    Temporary

    • Turbo Tax explains tax returns can be filed as a non-resident when the move is not expected to last for more than a year. The Internal Revenue Service classes temporary residency as less than one year, but some states have local rules classing a temporary move as less than six months.

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