Navigating residency for state tax purposes

Generally, state residents are subject to tax on all income, regardless of where it was earned – both earned income (e.g., wages and business income) and unearned income (e.g., interest, dividends, and capital gains). Nonresidents are generally taxed only on the income earned in that state, which is determined based on specific “allocation” methods applicable to compensation (whether deferred, equity, or cash) and business income realized through a pass-through entity. And depending on the state, sometimes sales of ownership interests in pass-through entities are also subject to allocation.

Our residency tax services bring together credentialed accountants, experienced attorneys, and former senior state and local government executives to help clients understand and address the complex challenges involved in state taxation. We interpret evolving residency laws into clear, actionable guidance, and explain how factors such as day counts and patterns of personal and professional activities can impact your tax profile.

Even if you already have a tax advisor, our team can complement your existing planning based on decades of experience in assisting clients with these types of issues.

In focus: State tax audit support