Wisconsin income tax question

[cientax]

I have a new client that moved from WI in Oct 2006 to Texas into a nursing home and was receiving IRA RMD's during 2007. She had state and federal withholding from her distributions. Since she was no longer a resident of WI, are the distributions from her IRA considered WI source and required to pay WI tax on these distributions.We will be filing the 1NPR form.

[mcb39]

Not enough information. Since WI has Income Tax and Texas does not; or course, you need to file the 1NPR. However, I have a similar client who receives Wisconsin Retirement Benefits, but is in a Nursing Home in Colorado. After all of her medical bills, etc.; she doesn't owe any tax to anyone. After filing this way for a couple of years, I advised the POA to stop withholding on her Pension. We did, however, file a return last year in order to get the stimulus. Every set of circumstances is different.

[cientax]

Not enough information. Since WI has Income Tax and Texas does not; or course, you need to file the 1NPR. However, I have a similar client who receives Wisconsin Retirement Benefits, but is in a Nursing Home in Colorado. After all of her medical bills, etc.; she doesn't owe any tax to anyone. After filing this way for a couple of years, I advised the POA to stop withholding on her Pension. We did, however, file a return last year in order to get the stimulus. Every set of circumstances is different.

We are working on her 2006 WI return because it was never filed when her son took the paperwork to Jackson Hewitt. Now she has received a CP200o from IRS for not reporting all her income on her federal return. There were no medical expenses until 2007 so she could not itemize in 2006. I don't know what other information I left out of the first post that is needed to determine if the income is WI source for 2007 if she didn't live and was no longer a resident of WI.

[Lion EA]

According to your first post, she was a WI resident until she moved to TX in October. At that time, did she intend to return to her WI home? Did she expect her stay in TX to be temporary? We don't have enough information to determine if she was a part-year or full-year resident of WI for 2006.

If she received a CP2000 for 2006, doesn't that imply that JH or her son DID file her 2006 return but that it omitted some income with was reported to the IRS? She was certainly a full-year resident of the USA and needs to report all her income for that year on her federal return.

[cientax]

According to your first post, she was a WI resident until she moved to TX in October. At that time, did she intend to return to her WI home? Did she expect her stay in TX to be temporary? We don't have enough information to determine if she was a part-year or full-year resident of WI for 2006.

If she received a CP2000 for 2006, doesn't that imply that JH or her son DID file her 2006 return but that it omitted some income with was reported to the IRS? She was certainly a full-year resident of the USA and needs to report all her income for that year on her federal return.

I'm actually working on both years 2006 and 2007. The 2006 return I don't have a problem in determining whether she was part year or full year resident of WI. The WI returns were not filed but they failed to include all the income on the federal return, thus the CP 2000 from IRS. She moved to Texas and has no intention of moving back to WI because they expect her to pass away soon in the nursing home here in Texas. She lived in Texas the entire year 2007 and received income from IRA distritutions during 2007 that came from a credit union and from a pension that are located in WI and had state inocme tax wihheld. I'm trying to determine if this income is taxable and reportable as WI income on the state tax return since she was no longer a WI resident in 2007.

[kcjenkins]

No, just because you have retirement income from some other state, does not make it taxable to that state, if you are a non-resident.