# Filing Out Of State State Tax?



## Travis Alex (Jan 14, 2018)

Ok, so first time doing taxes with Lyft and Uber this year so bare with me.

So as of right now I live in RI, I spent most of my time driving in Mass. (Boston), but wasn't really sure if how Uber and Lyft work constantly crossing state borders if I have to claim both MA and RI state taxes. Does anyone have experience with this? Thanks in advance.


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## FLKeys (Dec 27, 2018)

Great question. I don't have state taxes in Florida and I don't cross state lines driving. However i am very interested in this question because I guess I am weird.


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## Disgusted Driver (Jan 9, 2015)

This reminds me of MLB players, they actually have to file nonresident tax for the income they earn at games out of state.

My personal opinion having nothing to do with the actual law is:

You really shouldn't have much in the way of declarable income if you are taking the mileage deduction
Since they don't break it out by state how can you? Go over every trip? No state is going to come after you so I would just declare it in the state where you live and got your 1099.


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## Launchpad McQuack (Jan 8, 2019)

Every state has somewhat different rules. This is how it works in New Jersey.

As a New Jersey resident, I have to file a New Jersey income tax return and report *ALL* income that I earned for the year, regardless of location. If I earned income in other states and had to pay taxes to those states, I can take a credit on my New Jersey return for those taxes paid to other states.

If I was *NOT* a New Jersey resident but I earned income while in New Jersey, I would have to file a New Jersey non-resident income tax return. It's a separate form from the resident income tax return (NJ1040NR vs. NJ1040). In that case, I think I only have to report income that I earned while in New Jersey, but I'm not sure. I've never filed the non-resident return.

You'll have to look up the rules for your states because I don't know them. I remember that the rules were different when I lived in Indiana. If I was doing this in multiple states, I would make sure that I keep a good trip log that can be easily filtered by state. Excel is good for this. Otherwise, it would be a nightmare come tax time.


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## UberTaxPro (Oct 3, 2014)

Travis Alex said:


> Ok, so first time doing taxes with Lyft and Uber this year so bare with me.
> 
> So as of right now I live in RI, I spent most of my time driving in Mass. (Boston), but wasn't really sure if how Uber and Lyft work constantly crossing state borders if I have to claim both MA and RI state taxes. Does anyone have experience with this? Thanks in advance.


Generally you'd file a non-resident MA return and a resident RI return. You'd receive credit from RI for any taxes withheld or paid to MA during the year. I'm guessing that your situation is different in that you haven't been paying estimated tax to MA?


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## FLKeys (Dec 27, 2018)

Does Uber report earnings by state for drivers that drive in multiple states? I would think they would have to, to send the proper 1099's to each state.


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## UberTaxPro (Oct 3, 2014)

FLKeys said:


> Does Uber report earnings by state for drivers that drive in multiple states? I would think they would have to, to send the proper 1099's to each state.


I don't think they do, at least I've never seen that. It's really the business owner (driver's) responsibility to do that if necessary.


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## FLKeys (Dec 27, 2018)

UberTaxPro said:


> I don't think they do, at least I've never seen that. It's really the business owner (driver's) responsibility to do that if necessary.


I get that it is business owners responsibility I guess what I don't know is if Uber/Jyft send states copies of 1099's where there are state taxes. I'm in Florida so no State income tax. How would the states know outside of the honor system?


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## UberTaxPro (Oct 3, 2014)

FLKeys said:


> I get that it is business owners responsibility I guess what I don't know is if Uber/Jyft send states copies of 1099's where there are state taxes. I'm in Florida so no State income tax. How would the states know outside of the honor system?


States all have there own tax laws but most generally follow the federal system. You'll notice that when you file in most states a copy of your federal return goes with it. They get whatever info they want off your federal return. I don't think there are any states with their own 1099 system.


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## CaptainToo (Dec 5, 2017)

The Uber 1099-K form has the state in which the income is earned, listed in box 6. I would expect the OP should receive two 1099-K with the appropriate earnings on both. If Uber does not creste the second 1099-K then I bet Maasschusetts would badly want to know that...

MA certainly expects a NR return for and earnings from driving in MA.


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## Launchpad McQuack (Jan 8, 2019)

CaptainToo said:


> MA certainly expects a NR return for and earnings from driving in MA.


If you pick up in one state and drop off in another state, is the income allocated to the state that you picked up in, the state that you dropped off in, or do you split it between the two? Likewise for mileage expenses? Do you have to log your mileage when you cross the state line?



UberTaxPro said:


> States all have there own tax laws but most generally follow the federal system. You'll notice that when you file in most states a copy of your federal return goes with it.


FYI to those reading, this is not universally true. For example, in New Jersey we do NOT submit a copy of our federal return with our state return. We are required in some instances, though, to file copies of some of the federal schedules and forms that go with the federal 1040 with our state returns.

A couple key differences that I know of between New Jersey tax law and federal tax law:

New Jersey does not allow you to exclude health insurance payments that are withheld from your paycheck from your employee wages. The IRS does. For this reason, my W2 wages are different on my federal 1040 than on my New Jersey NJ1040. My W2 wages are higher for New Jersey than for federal.

New Jersey does not allow you to declare a net loss for stock investments. If you lose money in the stock market, the IRS allows you to deduct that loss from your income up to a limit and carry the loss forward to future years if the limit is exceeded. New Jersey doesn't allow this. If you have a loss, you can't deduct it from income. You can only put non-negative numbers on your NJ1040. If you have a gain, however, you have to declare it as income and pay income tax on it. Since you can't declare a loss, there is no carry forward of loss to future years.


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## UberTaxPro (Oct 3, 2014)

Launchpad McQuack said:


> If you pick up in one state and drop off in another state, is the income allocated to the state that you picked up in, the state that you dropped off in, or do you split it between the two? Likewise for mileage expenses? Do you have to log your mileage when you cross the state line?
> 
> 
> FYI to those reading, this is not universally true. For example, in New Jersey we do NOT submit a copy of our federal return with our state return. We are required in some instances, though, to file copies of some of the federal schedules and forms that go with the federal 1040 with our state returns.
> ...


Where did you get your information about NJ not requiring a copy of your 1040?
The following quote is from the NJ instructions for filing NJ-1040: 
"Federal/State Tax Agreement The Division of Taxation and the Internal Revenue Service have entered into a Federal/State Agreement to exchange Income Tax information in order to verify the accuracy and consistency of information reported on federal and New Jersey Income Tax returns." Instructions for NJ-1040

I have filed NJ returns in the past and I seem to remember the 1040 being required but not all the schedules.


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## Launchpad McQuack (Jan 8, 2019)

UberTaxPro said:


> Where did you get your information about NJ not requiring a copy of your 1040?
> The following quote is from the NJ instructions for filing NJ-1040:
> "Federal/State Tax Agreement The Division of Taxation and the Internal Revenue Service have entered into a Federal/State Agreement to exchange Income Tax information in order to verify the accuracy and consistency of information reported on federal and New Jersey Income Tax returns." Instructions for NJ-1040
> 
> I have filed NJ returns in the past and I seem to remember the 1040 being required but not all the schedules.


The IRS and NJ Division of Taxation exchange information with one another, but you are not required to submit a copy of your federal 1040 with your NJ1040. I am a New Jersey resident and have been filing a New Jersey tax return every year since 2006. It doesn't say anywhere in the instructions to include a copy of your federal 1040, and I never have.

With that said, there may be specific situations that did not apply to me where you are required to include a copy of your federal 1040. I know you sometimes have to include copies of some of the federal schedules or forms. For example, if you file a Form 4868 with the IRS to get an extension of time to file, you have to include a copy of that with your NJ return if you are not filing by the deadline.


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## UberTaxPro (Oct 3, 2014)

Launchpad McQuack said:


> The IRS and NJ Division of Taxation exchange information with one another, but you are not required to submit a copy of your federal 1040 with your NJ1040. I am a New Jersey resident and have been filing a New Jersey tax return every year since 2006. It doesn't say anywhere in the instructions to include a copy of your federal 1040, and I never have.
> 
> With that said, there may be specific situations that did not apply to me where you are required to include a copy of your federal 1040. I know you sometimes have to include copies of some of the federal schedules or forms. For example, if you file a Form 4868 with the IRS to get an extension of time to file, you have to include a copy of that with your NJ return if you are not filing by the deadline.


The IRS is authorized by IRC section _6103_(d) to disclose federal tax information to state and local tax authorities for tax administration purposes. So whether you send it in or not NJ has access to it.


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## Launchpad McQuack (Jan 8, 2019)

UberTaxPro said:


> The IRS is authorized by IRC section _6103_(d) to disclose federal tax information to state and local tax authorities for tax administration purposes. So whether you send it in or not NJ has access to it.


Like I said, they exchange information with one another but you are not required to submit a copy when you file.


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## UberTaxPro (Oct 3, 2014)

Launchpad McQuack said:


> Like I said, they exchange information with one another but you are not required to submit a copy when you file.


The Federal/State agreement has resulted in the Federal/State e file system. 37 states participate including NJ. When you file your return in the Federal/State efile system your federal and state returns are packaged together, sent to the IRS and then to the participating state. So the only ways to not include your federal return with your NJ state return is to paper file or use the NJ online filing service. So as you say, "you are not required", but when using the Fed/State e file the federal return is being shared automatically with the states.


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## Launchpad McQuack (Jan 8, 2019)

UberTaxPro said:


> So the only ways to not include your federal return with your NJ state return is to paper file or use the NJ online filing service.


I paper file.


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