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Employee

Question

In which state should severance be taxed if I moved to another state (from MD to CO) while receiving the severance income?

Forum|Forum|6 years ago
June 1, 2019
3 replies
0 views

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TurboTax Deluxe Windows

Employee

Was the severance paid in a lump sum, or in multiple payments over time?

Multiple payments over 5 or 6 months.

Rules vary by state, but in general you report the income on a tax return for the state in which it was earned, even if you are living in another state when you received it.

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MJA23Author

Employee

Multiple payments over several months.

Employee

You claim what you received while in MD on MD taxes, and what you received while in CO on CO's taxes.

MJA23Author

Employee

That's what I thought, but the MD company is saying that because I didn't perform any work for them while living in CO, the severance is taxed in the state where I "earned" the money (MD).

Do you remember how you ended up solving this? I.e. where did you pay state taxes?