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Partial year resident in an income tax state with 1099 income

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  • Partial year resident in an income tax state with 1099 income

    I want to make sure i'm only paying state income tax on the income I need to. I graduated residency last year in June from Kentucky (state income tax) and started my attending job in August in Tennessee (no state income tax). We moved officially in June but owned our new TN house in May. Obviously all W2 income earned by my wife and I while in KY I will pay KY state income tax on. My question is my 1099 income. I was receiving a stipend on 1099 for my future job in TN prior to me moving last year. I had set up a sole prop with my future TN address during the entire time I received the stipend. Now of course that 1099 income is classified as business income on my 1040. My question is do I need to pay KY state income tax on that 1099 income from my TN job payed to my TN sole prop while I was living in KY?

    Also my last paycheck for residency was at the end of June. We had officially already moved and sold our house. Does this last paycheck need KY state income tax paid? I did get KY state withholding on this paycheck.

     

    Thanks in advance!

  • #2
    You will have to pay income tax on income earned in other states while you are a resident of Kentucky if the other state does not have an income tax code. I'm afraid that is the case for the 1099 income.

    As for the last paycheck, you earned it while you were working in Kentucky, so you'll have to include that, too. In fact, it will be reported by your employer on your W2 as Kentucky-sourced income so you don't really have a choice.

    (At last, a question from Kentucky!!!)
    Working to protect good doctors from bad advisors. Fox & Co CPAs, Fox & Co Wealth Mgmt. 270-247-6087

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