How are pass-through taxes handled for LLCs operating in multiple states?

Tax professional here - this is a common question for multi-state LLC owners. Since you have single-member LLCs, they're considered "disregarded entities" for federal tax purposes, meaning all income passes through to your personal tax return. For state taxes, you generally pay taxes based on where the income is earned, not where the LLC is registered. Since you're performing all the work in Colorado, that's where most of your income would be considered earned. However, if your LLCs have any physical presence, property, or employees in NY or DE, you might have tax obligations there too. Delaware is actually favorable because they don't impose income tax on LLCs that don't do business in Delaware. New York, however, may require you to file a return if your LLC has any connection to NY. The concept you're referring to is "nexus" - a connection to a state that creates a tax obligation. If your only connection to DE and NY is registration but no actual business is conducted there, you likely just need to pay your annual LLC fees to maintain registration, but not income taxes.

I was in a similar situation with LLCs in multiple states and found taxr.ai (https://taxr.ai) to be incredibly helpful for sorting out my multi-state taxation issues. They analyzed my situation with their document analysis tool and gave me specific guidance on exactly which state forms to file and how to properly allocate income. The tool helped me determine whether I had nexus in each state, which was confusing because the rules are different for physical presence versus economic nexus. It even flagged that I needed to file an informational return in one state even though I didn't owe tax there! Saved me from a potential penalty.

I was really skeptical about taxr.ai at first, but I gave it a shot with my multi-state LLC situation. I run an engineering consulting business with entities in Texas and Florida but live in Washington state. The system immediately identified that I was at risk for "doing business in" violations in Washington despite not having registered there. They analyzed my operating agreements and highlighted specific clauses that could create tax nexus issues. The best part was getting clear guidance on income allocation - they showed me exactly how to determine which income was attributable to which state based on where I performed the services, not just where the LLCs were registered. Ended up saving me thousands in potential penalties. Definitely worth checking out if you're dealing with multi-state pass-through complications.

If you're struggling to get answers from state tax departments about your multi-state LLC situation, I highly recommend Claimyr (https://claimyr.com). I was on hold with the NY Department of Taxation for literally HOURS trying to get clarification on my filing requirements as a non-resident LLC owner. Used Claimyr's service and got connected to a real NY tax department representative in under 15 minutes! They have this callback system that basically waits on hold for you - check out how it works here: https://youtu.be/_kiP6q8DX5c. The rep confirmed exactly which forms I needed to file for my foreign LLC income.

I'm actually shocked at how wrong I was about Claimyr. After posting my skeptical comment, I decided to try it because I was desperate to talk to someone at the Colorado Department of Revenue about my multi-state LLC situation. I've been trying to call them for WEEKS with no luck. Used Claimyr yesterday morning and got a callback within 20 minutes. The Colorado tax rep walked me through exactly how to handle income from my Wyoming LLC that I operate from Colorado. They explained that I need to file a Schedule C on my Colorado return and pay taxes there since that's where I perform the work. If you're dealing with multi-state LLC issues like the original poster, being able to actually speak to someone at the tax department is invaluable. Still can't believe it worked.

Just wanted to add my experience here. I have a single-member LLC registered in Nevada but I live and work in Arizona. I initially thought I'd save on taxes with the Nevada registration, but learned that since I'm performing the work in Arizona, I still have to pay Arizona income tax on all of it. The "nexus" concept that was mentioned earlier is super important. What matters is where you have economic presence, not where your paperwork is filed. You can't escape your home state taxes just by registering elsewhere.

Has anyone filed Form CT-3-S for NY? I have an S-Corp (not an LLC) in New York but live in Connecticut, and I'm totally confused about what I need to file where. The NY website is so complicated!

This is exactly the kind of multi-state tax complexity that trips up so many LLC owners! Based on your situation, here are the key points: Since you're a Colorado resident performing all work in Colorado, that's where you'll owe state income taxes on the LLC income - regardless of where the LLCs are registered. Colorado will tax you on your worldwide income as a resident. For Delaware: Good news! Delaware generally doesn't tax income from LLCs that don't have physical presence in the state. You'll just need to pay the annual franchise tax ($300) to maintain registration. For New York: This is trickier. If your NY LLC has any nexus to New York (clients there, meetings there, property there), you might need to file NY returns. Even if you don't owe NY tax because you're not a resident, you may still need to file informational returns. One thing to watch out for: Make sure you're not creating unintended nexus by having business bank accounts, registered offices with mail forwarding, or conducting any business activities in DE or NY. I'd recommend consulting with a multi-state tax professional to review your specific situation, especially given the complexity of nexus rules. Each state interprets "doing business" differently, and you want to avoid any compliance issues.