Multi-State Tax Filing
State Returns, Form 1040, Form 1040-NR, 183 Days
State income tax returns for people who have moved abroad, earn income in several states, or run a business with a US footprint.
What does Multi-State Tax Filing involve?
Leaving the US does not automatically mean leaving your state. Each state decides for itself who is a resident, and some keep taxing former residents until they are shown clear evidence of a permanent move. We deal with the final resident return, the non-resident returns that follow, and the domicile question between them.
Forms and filings involved
- State Returns
Why a move to the UK does not always end a US state tax obligation, and how states decide who remains a resident.
- Form 1040
The annual federal return for US citizens, green card holders and US residents, reporting worldwide income wherever the filer lives.
- Form 1040-NR
The federal return for people who are not US citizens or residents but have US-source income, a US business or a refund to claim.
- 183 Days
How the IRS decides whether a non-citizen without a green card is a US resident for tax, and the exceptions that change the count.
State tax does not follow federal rules
State income tax is separate from the federal system, and each state writes its own rules on who is a resident.
Most use some combination of domicile, meaning the place a person intends as their permanent home, and a statutory test based on days and a place of abode. Moving to the UK does not by itself end domicile. Some states, notably California, New York, Virginia, South Carolina and New Mexico, are known for being slow to release former residents who keep a home, a driving licence, a voter registration or family there.
Two federal reliefs that people abroad rely on often have no state equivalent. Some states do not allow the foreign earned income exclusion, and most give no credit for foreign income tax, so UK tax paid does nothing to reduce the state bill. The US/UK treaty covers federal income tax and does not generally bind the states, though some states start their computation from a federal figure that already reflects a treaty position. A UK resident still treated as a state resident can therefore face real double taxation.
In the year of a move, a part-year resident return divides income between the period of residence and the period after it. After that, a non-resident return is still due to any state where income arises: rent from a property, a partnership share, or wages for days physically worked there. Travelling employees can owe returns to several states in one year, with a credit in the home state for tax paid elsewhere. Businesses meet the same issue as nexus, where staff or sales in a state create filing duties.
State filings we take on
- 01
- Domicile and statutory residence review for the state you left
- 02
- Part-year resident return for the year of the move
- 03
- Non-resident returns for state-source rent, wages and partnership income
- 04
- Credits for tax paid to other states claimed in the home state
- 05
- Evidence file supporting the change of domicile if the state asks
Who this is for
Americans who moved to the UK from a state that taxes income
- UK residents with rental property or partnership interests in a US state
- Employees who work in several states during the year
- UK companies with staff or sales in more than one state
Why US UK Tax Returns
Each return is prepared with the other country's return open beside it, so a credit, election or disclosure on one is supported by the other.
One File
US and UK returns prepared in the same engagement and reconciled line by line.
Primary Sources
Every position traced to the Code, the treaty, IRS instructions or HMRC guidance.
Scope First
Returns, forms, years and fee agreed in writing before work begins.
The Same People
The team that files this year carries the elections and credits into the next.
Questions we are asked
I live in London now. Why is my old state still asking for a return?
Because in the state's view you may not have left. Domicile continues until you establish a new one, and a state will look at where you keep a home, where your family lives, where you vote, and which licences and registrations you hold. Some states are more persistent than others. A clean break with evidence usually resolves it, but the rules differ by state and the answer depends on what ties remain.
Does the foreign earned income exclusion work on my state return?
It depends on the state. Many states begin with federal adjusted gross income, which already reflects the exclusion, and so follow it without further steps. Some require it to be added back. The foreign tax credit is a bigger gap: most states give no credit for income tax paid to another country. If you remain a resident of a state that taxes income, UK tax generally will not reduce what that state charges.
I am British and spent a few weeks working in the US. Do I owe state tax as well as federal?
Possibly. Many states tax non-residents on wages for days physically worked in the state, and the thresholds vary from none at all to a set number of days or amount of income. The treaty exemption for short-term business visitors applies to federal tax, and states are not generally bound by it. Whether a return is due depends on the state, the days worked and who bore the cost of the salary.
Primary sources
What this page says is drawn from the official material below. Read it yourself; we would rather be checked than trusted.
Last reviewed
Also in US Returns
From the Blog
Ready to talk it through?
Tell us where you live, what you hold and which years are outstanding. We will say what applies and what it involves before any work begins.
Contact us