Can the same income be W2'd to two states?

[Larmil]

You can be taxed by two states on the same income

Let's say you lived in MO and worked in KS (as many do in the Kansas City area). Then halfway thru the year you move to TX. KS will tax the income the first half of the year. TX has no income tax. MO has no part-year resident form. Part-year residents are taxed as either resident or non-residents. If taxed as a resident you get credit for the tax to KS. Since TX has no income tax MO will tax the money you earned in TX. If taxed as a non-resident you won't pay tax on the money you earned in TX, but you will pay tax on the money your earned while a resident of MO with no credit for the tax you paid to KS.

It happens often and was upheld by the MO Supreme Court.

[David1980]

Let's say you lived in MO and worked in KS (as many do in the Kansas City area). Then halfway thru the year you move to TX. KS will tax the income the first half of the year. TX has no income tax. MO has no part-year resident form. Part-year residents are taxed as either resident or non-residents. If taxed as a resident you get credit for the tax to KS. Since TX has no income tax MO will tax the money you earned in TX. If taxed as a non-resident you won't pay tax on the money you earned in TX, but you will pay tax on the money your earned while a resident of MO with no credit for the tax you paid to KS.

It happens often and was upheld by the MO Supreme Court.

Add two weeks spent in CA as a non-resident (1 paycheck and CA now on the W-2) and now you can't efile the CA return.

Like I said the whole thing sucks.

Or how about those returns where the taxpayer is in one state and the spouse in another and the state forces the same filing status as fed and you have to either file the fed MFS or pay income tax on the non-resident spouse' income. I guess that's going off topic...

[JON]

Payroll processing could be right?

I think Minnesota does this now. If you receive salary that was deferred after you leave the state if is taxable back to the state where it was earned. So if you are a resident of another state when you receive it it could be taxable in the two states with a credit for taxes paid to the other state on that amount of money. MN has gone so far as to say covenents not to compete paid to people after they have moved out of the state are taxable back to MN even though you have left the state. It seems there is a theme here in Minnesota, they can not stop you from moving out of the state, but they will tax you if they can after you have left.