Individual U.S. State Income Tax Returns For Expats in Colombia
At USATaxo.co, our licensed and experienced tax professionals prepare individual U.S. State income tax returns for expats living in Colombia.
Although the majority of expats are required to file federal income tax returns, only some expats living in Colombia may still be required to file an individual State Tax Return. There are 42 states in the U.S. that have income tax requirements and some states that have long-reaching enforcement powers similar to the IRS. Expats may be required to file a State Tax Return when first moving to Colombia (being a part-year state resident) or when passive income is sourced (e.g., rental property in California).
As an expat there are complex federal tax laws to navigate, but the intricacies of various state tax laws can be just as tricky. Although most states do follow many of the federal laws and rules, some states do not. For example, states like California, New Mexico, South Carolina, Virginia, and New York have very different rules and regulations. Plus, some states don’t have income taxes, such as:
* Only requires income tax on dividends and interest
No matter your “home state” and personal situation, we are well versed in tax law to allow any U.S. expat in Colombia to meet their filing obligations.
When to File State Income Tax as an Expat in Colombia
In addition to your home state regulations, there are several other factors that we consider when it comes to your state income tax filing as an expat.
Perhaps you earned income directly in a state, lived part of the year in the U.S., and had sourced income from two or more states. Whatever your scenario and state, we navigate any situation regardless of the complexity. Certain examples of when you would need to file a State return as an expat are the following:
Examples of Common Scenarios
A common scenario is that you decided to move to Colombia sometime during the year to start a new job. Federally, you’ll report your income from both jobs with a Form 1040 (the one in the U.S. and the new job in Colombia). And depending on your home state, we’ll determine if there is anything you need to file. For example, in states like California, New York, Michigan, Illinois, or Arizona [CC1] [MOU2] you would need to report the income you earned while you were a resident or part-time resident.
We’ve also encountered clients who actually needed to file a state tax return in order to receive a refund from the state. For instance, a pensioner from New York living in Colombia does not have to pay state income tax. But if state income tax was withheld from the pension income, the pensioner would have to file a N.Y. state tax return in order to get a tax refund.
Lastly, say that you moved to Colombia but kept your primary residence in your home state and converted that primary residence to a rental income property. Unless that property is in one of the nine states mentioned above without state income tax, you would need to file a state income tax return to report the rental income collected from your tenants so the state receives its share of the net proceeds.