A Guide For Determining State Residency And Preparing State Returns

CPE Credits
NASBA Category

General knowledge of tax preparation.



Course Description

This course was created to provide information for tax professionals to properly complete the tax returns of states other than their home state. The main thrust of this course is to discuss how states look at residency in determining if a taxpayer should be treated as a resident for income tax purposes even if he or she doesn’t live in the state. With many states having budget problems, the state revenue departments are looking at every possible means of increasing income. They are now looking at issues that never used to draw too much attention. This course will be an especially valuable reference guide for new tax preparers as this material is not taught in basic income tax courses.


William Roos

William Roos has been in the tax business for over 37 years. His specialty is training tax preparers to produce quality tax returns. He has written numerous tax papers and produced various worksheets and preparer aids with the idea of making it easier for tax preparers to have accurate tax information available to them. Bill writes self-study courses for Western CPE and is a tax webinar moderator for Western CPE. Bill also works with Vern Hoven and Sharon Kreider in producing the Federal Tax Update manual each year. As a result of his help during webcasts, he has established an extensive network …

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Course Specifics

Course ID
Revision Date
November 7, 2018
Advanced Preparation


Compliance Information

NASBA Provider Number: 103220
IRS Provider Number: 0MYXB
IRS Course Number: 0MYXB-T-01167-17-S
IRS Federal Tax Law Credits: 2
CTEC Provider Number: 2071
CTEC Course Number: 2071-CE-1121
CTEC Federal Tax Law Credits: 2

Learning Objectives

Upon successful completion of this course, participants will be able to:

Chapter 1

  • Note the various state policies for taxing income and ways that states discover that a taxpayer has failed to file a return
  • Specify the potential repercussions for failing to file a return in another state and cite the applicable late filing or failure to file penalties
  • Note the resources that are available to reference for help in preparing an unfamiliar state return

Chapter 2

  • Specify different state filing requirements for part-year or nonresidents
  • Note circumstances where a state filing status may differ from the federal return as well as the availability of certain filing statuses for state filing purposes
  • Recognize the different state definitions for dependents and their subsequent tax treatment

Chapter 3

  • Define domicile, noting how the definition differs from residence for tax purposes, factors or acts that determine permanent domicile, and which states have the most comprehensive requirements
  • Note how residency is defined and identify how states apply the residency rules to taxpayers domiciled in another state
  • Determine the proper residency status when both spouses are living and working in different states

Chapter 4

  • Note the federal residency rules for military personnel and their spouses, including circumstances where federal rules override state rules
  • Recognize residency situations in community property states, noting the tax treatment resulting from living in a community property state as well as the impact of reciprocal agreements
  • Identify the advantages and disadvantages of working from home when the employer is in another state, noting which states believe income should be taxed in the employer’s home state

Chapter 5

  • Note the starting point requirements for computing a state’s taxable income, citing reasons why the state taxable income may differ from the federal taxable income
  • Identify what income is taxable to the nonresident state, noting applicable adjustments to income resulting from deductions or credits
  • Cite how to allocate income to each state depending on whether the taxpayer is a resident, part-year resident, or a nonresident