Determine if you are a tax resident of the state for tax purposes - YouTube

Here's how to figure out if you need to file state taxes while living in another country:

Determine if you are a tax resident of the state:

If you meet the following criteria while living overseas, you will most likely be deemed a

state resident:

You were a resident of the state at any time during the tax year.

While you are away at sea, your immediate family resides in the state.

Each time you return to the United States to live, you return to the state.

You live in the state (a permanent place of residence)

In the state, you keep your driver's licence, identification card, and voting privileges.

Check to see if you have a source of income in the state.

Work-related income is virtually always taxable in the state.

If you live in the state, other income from a state source, such as a pension, retirement

income, or government benefits, may be taxable.

The qualifications for residency vary by state, but most consider you a non-resident if you

live outside the state for more than six months.

Income Taxes in Different States

In the United States, state governments impose their own income taxes.

Non-residents are taxed in the state where they earn money.

The rates are progressive and differ by state.

The income tax brackets are essentially the same as, or slightly modified versions of,

the federal tax brackets.

Seven states, on the other hand, do not levy income taxes.

Alaska, Florida, Nevada, South Dakota, Texas, Washington State, and Wyoming are among them.

In New Hampshire, only interest and dividend income is taxed, but in Tennessee, only stock

and bond income is taxed.

RENTAL PROFITS

Non-residents with rental income are subject to federal and, in most cases, state taxes.

Rental income is considered investment income at the federal level, and non-residents can

choose whether their rental income is categorized as Fixed Determinable Annual Periodical (FDAP)

income or Effectively Connected Income (ECI).

In general, ECI is considered when a non-resident engages in a trade or company in the United

States.

FDAP income is earned when a non-resident earns income from stable or regular sources,

or when income is determinable before it is earned.

Rental income is subject to a 30 percent withholding tax under the FDAP classification, which is

charged on the gross amount, without regard to deductions, personal allowances, or credits.

If the taxpayer elects to have rental income classed as ECI, standard progressive tax rates

are applied after permissible deductions.

Non-residents are only granted this option when it comes to real estate income.