Moving to Texas: your last return for the old state

Texas does not tax personal income, so there is no Texas return to file. The state you left is a different question, and it usually wants one more return from you.

The federal return does not change

Moving between states changes nothing on the federal return. The same form, the same filing status rules, the same credits, the same deadline. There is no federal deduction for moving expenses for most people either, so the truck, the deposit and the two weeks of overlapping rent are simply costs. If your income and your household are what they were, the federal side of the year looks the way it always did.

What Texas does and does not tax

Texas levies no personal income tax. There is no individual state return here, and no Texas equivalent of the form you used to file. That is not the same as no tax. The state raises money through sales and use tax on most of what you buy, and local property tax on what you own funds schools, cities and counties, which is why a Texas property tax bill can land heavier than the state income tax you stopped paying. If you run a business through an entity, the state's franchise tax report is a separate annual filing; the Texas franchise tax report covers who owes one.

The part-year return for the state you left

Most states with an income tax expect a part-year resident return for the year of the move: one return covering the income you earned while you lived there, with the rest belonging to wherever you went. Where you keep earning money the old state considers sourced to it, a nonresident return can be needed as well, sometimes for years afterwards.

Two shapes cover most of it. Income allocated by residency period follows the calendar, so what you earned while resident there is theirs. Income sourced to the state follows the work or the property, so it belongs to that state regardless of where you were living when it was paid. Which one applies, and how a particular state measures either, is that state's law rather than a federal rule. The IRS keeps a directory of state websites, which is the shortest route to your old state's revenue department and its part-year instructions.

Proving the move

Residency is decided on facts, and a state that thinks you never really left will ask for them. The month you move is the month to collect them, because nobody reconstructs this convincingly two years later. Keep the lease or the closing documents from both ends. Keep the dates on the Texas driver's license and the vehicle registration. Keep the voter registration, the school enrollment records for the children, the payroll record showing when your work state changed, and the utility accounts opened here and closed there.

The date you claim as your move date should be the date those documents support, not the date you decided to go. Where the paperwork says one month and your return says another, the paperwork is what an examiner reads.

Where the W-2 goes wrong

Boxes 15 through 17 of a W-2 carry the state, the state wages and the state income tax withheld. Payroll is slow to notice a move, so it is ordinary to see the old state still sitting in box 15 for weeks or months after you left, with tax still coming out for a state you no longer live in.

That is not something to shrug at, and it is also not something to fix by ignoring the old state. The correction runs through that state's return, which reconciles what was withheld against what you actually owe it and sends back the difference. Skip the return and the over-withheld money simply stays there. What the W-2 boxes mean covers the rest of the form.

If you kept property or income in the old state

Rent from a house you did not sell, a share in a business still operating there, or wages for days you travel back to work can all stay taxable to that state after you leave. This is the point at which the year stops being a form-filling exercise, and where a preparer who works in both states earns the fee.

The checklist for the year you move

Update your address with the IRS so that notices and any paper refund follow you. Give both employers, the old one and the new one, correct state details rather than assuming payroll worked it out. File the moving-month documents somewhere you will find them again. And send the old state's part-year return before you decide that the state part of your tax life is finished.