HELP! Can US State (not Fed) tax me on the income I earned in the UK?

 Both my husband and I worked in the UK for the first six months and earned 50K each.

We moved so that my husband could take a job in the UK where he went on to earn another 50K. I earned nothing.

I am using TURBOTAX and now, it looks like our US state (which we were only residents for 6 months) wants to TAX us on 150,000 (the total of our US income and the total of our UK income).

Is this normal??

I must say I am in shock right now and feeling some heart palpitations.

We had a normal Fed return because we reported the taxes we paid on the UK income and the Fed tax form was a breeze.

Possibly - it depends on the laws of that State.

Okay, so it sounds like unless we lived in the 9 states that have no income tax, we are stuck paying taxes on our UK income to our home state in the US?

That stinks! 

I am not sure you read my answer. State residence and the State taxation of residents and non-residents each depend on the laws of the State to which you are referring.

Okay, so it sounds like unless we lived in the 9 states that have no income tax, we are stuck paying taxes on our UK income to our home state in the US?

That stinks! 

We live in one of the 9 States that have no income tax, but I get a pension from my previous employer in Louisiana and I have to pay Louisiana income tax on it even though we haven't set foot in the place in over 4 years, and we can't even vote in their elections because we are not residents in the State.

That stinks as well.

It looks like I might be able to claim a bone fide out of country residence status if I file an extension because I am out of the country.

If I do this, I believe that I can exempt as much as 90K of my foreign earned income from consideration in the US taxes (both fed and state).

Is this correct?

It is my first time filing from abroad and so I would appreciate some advice here.
Thanks in advance.

Both my husband and I worked in the UK USA for the first six months and earned 50K each.

We moved so that my husband could take a job in the UK where he went on to earn another 50K. I earned nothing.

I am using TURBOTAX and now, it looks like our US state (which we were only residents for 6 months) wants to TAX us on 150,000 (the total of our US income and the total of our UK income).

Is this normal??

I must say I am in shock right now and feeling some heart palpitations.

We had a normal Fed return because we reported the taxes we paid on the UK income and the Fed tax form was a breeze.

Sorry everyone:

I should have said that my husband and I worked in the USA from Jan -June 2013 and earned 50K each= 100K total.

Then in July 2013, we moved to England where my husband earned another 50K (me, nothing).

I believe that if I apply for an extension, I can wait out the time that will make us eligible for a bone fide residency in foreign country (currently something like 330 days). The end of May 2014, will give us 334 days in England.

Doing this, I believe, will allow us to offset our total income by excluding the foreign income altogether (limit of 90K but we need only exclude 50K).

Is this correct??
Thanks in advance.

Sorry everyone:

I should have said that my husband and I worked in the USA from Jan -June 2013 and earned 50K each= 100K total.

Then in July 2013, we moved to England where my husband earned another 50K (me, nothing).

I believe that if I apply for an extension, I can wait out the time that will make us eligible for a bone fide residency in foreign country (currently something like 330 days). The end of May 2014, will give us 334 days in England.

Doing this, I believe, will allow us to offset our total income by excluding the foreign income altogether (limit of 90K but we need only exclude 50K).

Is this correct??
Thanks in advance.

I guess you mean the physical presence test plus some bonus days (not the bona fide residence test that you won't meet until after 31 December 2014).  You can compare this to claiming foreign tax credits and choose whichever gives you the optimum answer.

Your return is not due until 15 June so you won't need to apply for an extension either yet.

Not all States allow the foreign earned income exclusion incidentally.

Thanks guya, yes, I meant the physical presence test.
It looks like my state is one that may require a slightly longer residency than the fed.

I think it is still worthwhile to get the extension for the physical presence test because I could save more on the federal return and then try to use that money to offset what we will owe to the state.

So complicated!

I lived in VA, which is one of the worst states among those that try to tax you forever. However, even VA does not tax income earned outside of VA by a part year resident.

Look into the rules for 'part year residents' for your former state. Also look at whether your domicile can be changed...what ties do you have, do you intend to return, etc. This may not be as onerous as you think.

Thanks- I filed for the extension with the fed gov and this automatically gives me an extension for the state.

I guess I have 2 more months to figure this out!

Another further complication:

My husband worked in the state of NY.

Is it correct that future state taxes will no longer involve the state of NY if there is no income coming from the state of ny? Does NY recognize the fed exclusion of foreign income earned?

Our only concern moving forward (after this year's taxes) is the state of our former residence?

Furthermore: I read just now that the State of CT does not recognize the foreign income exclusion by the fed gov.

Thus, I need to pay my taxes today, or suffer a penalty- is that correct?
The number of days for the  physical test of residence for CT is something like 450 days out of the last 548 days.

Is this correct?
Does anyone know?
Thanks in advance.

you need to be looking at the department of taxation for CT and NY and also calling their help lines. Whatever the cost of the call, it's likely worth it.