How to file taxes for split-year residency between California and Michigan

So I spent the first six months of 2023 living in California, then permanently relocated to Michigan for the remainder of the year. I'm pretty confused about how to handle my taxes properly to make sure I'm not paying double on the same income. My main concern is about interest income - I've got several bank sign-up bonuses from opening new accounts this year, plus interest from my savings accounts and some CDs that matured. Do I need to report all this income to both states? How do the residency rules work when you've officially moved mid-year? Anyone dealt with filing taxes across two states before? Really don't want to mess this up and end up paying more than I should. Thanks in advance for any guidance!

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18 comments

Dmitry Petrov

•8M

You'll need to file "part-year resident" returns for both California and Michigan. The good news is you shouldn't have to pay double taxes on the same income! For California, you'll file Form 540NR and indicate you were a part-year resident. You'll only pay CA tax on income earned while you were a resident there (Jan-June) plus any California-source income earned after you moved. For Michigan, you'll file MI-1040 with Schedule NR since you were a part-year resident. You'll only pay Michigan tax on income earned while living there (July-Dec) plus any Michigan-source income earned before your move. For those bank bonuses and interest income, you'll need to allocate them based on when you received them. If you received a bank bonus while living in California, it's taxable in California. If you received it while living in Michigan, it's taxable in Michigan. For ongoing interest from savings accounts, you'd allocate based on the months you lived in each state. Make sure you keep documentation of your exact moving date - that's your residency change date for tax purposes!

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Dmitry Petrov

•8M

The physical location of the bank doesn't matter - what matters is your state of residency when you received the income. If you were a Michigan resident when you received interest from a California bank, you report that interest on your Michigan return, not California. For interest that accrued over time (like from savings accounts), you technically should prorate it based on the days you were a resident in each state. For example, if you earned $365 in interest over the year, and lived in CA for exactly half the year, you'd report $182.50 to California and $182.50 to Michigan.

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Miguel Castro

•8M

After living in 3 different states in 2 years, I was completely lost with my multi-state tax situation. I tried a bunch of online guides but kept getting confused about which income went where. Finally tried https://taxr.ai and it was honestly a game changer for my situation. You upload your tax docs and it helps allocate everything correctly between states. The system even caught that I had allocated some of my investment income incorrectly between states, which would have cost me a few hundred dollars. It specifically helped with my bank interest from accounts I had in my previous state - I was about to report it all to my new state until it flagged that as incorrect. For part-year residency situations like yours, it seemed really good at handling the income splitting correctly.

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Miguel Castro

•8M

Yes, it actually gives you an explanation of how it's allocating each type of income. For bank interest and investment income, it showed exactly how it was prorating based on my residency dates. It also explained which types of income are based on physical location vs. residency status. I found that educational part really helpful. For documents, you can directly upload W-2s, 1099s, and other tax forms. The system reads them automatically and sorts the income by state. For my freelance income, I just had to clarify which state I was in when I did each project, and it handled the allocation. It actually made what I thought would be a nightmare process pretty straightforward.

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Connor O'Neill

•8M

Just wanted to update after trying taxr.ai for my multi-state situation. It solved exactly what I was struggling with! I had a similar mid-year move with interest income from several banks plus some freelance work in both states. The way it handled allocating my bank interest between states based on when I received it was super clear. It even showed me exactly which IRS rules applied to my situation, which honestly made me feel way more confident about the whole process. Before this I was really stressing about accidentally paying double taxes or missing something important. Definitely recommend for anyone dealing with split residency!

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LunarEclipse

•8M

If you're stuck trying to contact the Michigan or California tax departments for clarification, I'd recommend https://claimyr.com. I spent DAYS trying to get through to California's FTB with questions about my part-year residency. Used their service and got a callback from the CA tax department in about 20 minutes. The agent walked me through exactly how to allocate my bank interest and investment income between states. Saved me hours of hold music and frustration. You can see how it works here: https://youtu.be/_kiP6q8DX5c I had a particularly confusing situation with a bank bonus that posted right around my moving date, and getting actual confirmation from the tax authority gave me peace of mind.

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LunarEclipse

•8M

They use a technology that continuously redials and navigates the phone trees until it gets through to a representative. Once they have a live person, they call you and connect you. It's the same number anyone can call, but their system handles the waiting and navigating for you. No, they don't charge you to call the same number - they charge for the service of getting through the overwhelmed phone systems. It's like paying someone to wait in line for you. For me, spending a little money was worth it compared to wasting hours on hold trying to get through myself, especially with tax deadlines approaching.

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Keisha Brown

•8M

I was completely wrong about Claimyr. After my frustrating comment, I decided to give it a try since I was desperate to talk to someone at the California tax board about my own multi-state situation. I had been trying for THREE DAYS to get through on my own with no luck. Used the service and got connected to an FTB representative in about 15 minutes. The agent confirmed exactly how to handle my interest income allocation between states and cleared up my confusion about bank bonuses. Honestly, I feel kind of stupid for being so skeptical. Sometimes services actually do what they claim!

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Paolo Esposito

•8M

One thing to watch out for with California - they're pretty aggressive about maintaining that you're still a resident even after you've moved. Make sure you have clear documentation that you've actually established domicile in Michigan: - Michigan driver's license - Voter registration in Michigan - Michigan car registration - Closing California bank accounts or changing primary address - Changing your address on all official documents California has been known to audit people who move to lower-tax states, especially if you still have significant connections to California. Good luck!

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Paolo Esposito

•8M

You don't necessarily need to close the California bank account, but definitely make sure you've changed the primary address on the account to your Michigan address. Having a CA bank account with a CA address could be one factor they look at. The most important things are already done - driver's license, voter registration, and vehicle registration show your intent to permanently reside in Michigan. Also make sure your employer has your Michigan address for your W-2, and that any investment accounts are updated with your new address.

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