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    Any New Mexico Preparers?

    I have a client that was in New Mexico part year. Then moved here to Texas. He did change his home and domicile.

    As I understand the book on New Mexico, if he was in NM for more than 185 days, he is still considered a resident. Does he not get to prorate the income to the days in NM verses the days in TX?

    Not sure that NM can tax funds while the person had moved to another state?

    #2
    New Mexico Tax Preparers

    Go to the NATP Website and select Find a Tax Professional. The website address is
    natptax.com

    Comment


      #3
      TTB All States Edition (to be released February 2nd), page NM-2 says: "Part-year resident. An individual who was a New Mexico resident for part of the year, was not physically present in New Mexico for 185 days or more, and was domiciled in another state on December 31, 2005."

      Most states say that the physical presence test only applies if the taxpayer had a permanent home located in the state for the entire year. New Mexico appears to only care if you were physically present for 185 days or more. So the only way to be a part-year resident is to be physically present for less than 185 days.

      Comment


        #4
        Well, I found an EA in NM. She said that yes, he is considered a resident, but can still prorate the income to only the income received while in NM.

        So, I'm going to work on this.
        You have the right to remain silent. Anything you say will be misquoted, then used against you.

        Comment


          #5
          Oops, I missed that….

          TTB All States, page NM-5 says: “First-year residents, part-year residents, and nonresidents first calculate tax on total taxable income from all sources the same as full-year residents. Tax is then prorated based on a ratio of total adjusted New Mexico source income to total adjusted federal income.”

          Page NM-2 says: “First-year resident. An individual who moved to New Mexico during the tax year with the intent of making New Mexico their permanent residence. The 185-day rule does not have to be met in this situation.”

          Use Schedule PIT-B to allocate.

          Sounds to me like you can prorate only if the person is moving into the state. If they are moving out, NM wants to treat you as a full year resident if the 185 day rule is met.

          Comment


            #6
            From http://www.state.nm.us/tax/forms/yea...BInstfinal.pdf

            New Mexico residents must allocate
            in full to New Mexico all amounts on
            lines 1, 2, 3 and 7, column 1, on
            Schedule PIT-B. New Mexico residents
            whose income on lines 1, 2, 3
            and 7 was from a source outside New
            Mexico may claim a non-refundable
            CREDIT for the tax paid to the other
            state on that income. See the instructions
            for line 21 of 2005 Schedule PITADJ
            to calculate the credit.

            A first-year resident or part-year
            resident with income on lines 1, 2, 3
            and 7 received during the period in
            which the domicile was established in
            New Mexico allocate that income to
            New Mexico. A first-year resident or a
            part-year resident receiving income on
            lines 2, 3 and 7 while domiciled in another
            state allocates that income to the
            other state. Wages, salaries and tips,
            etc. (line 1, PIT-B) of a first-year resident
            and a part-year resident that were
            received during the portion of the year
            that the taxpayer was a nonresident of
            New Mexico are allocated to New
            Mexico only if the income was from
            employment within New Mexico.

            Comment


              #7
              Thanks. I will really study this and look into it further.

              Texas doesn't have a state income tax for individuals. So, trying to do other states returns is really challenging sometimes.
              You have the right to remain silent. Anything you say will be misquoted, then used against you.

              Comment

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