While you only need to file one federal tax return, you will probably need to file state returns for both your previous and new states of residence. That means you’ll have three returns to file unless you moved between states with no income tax.

Filing Part-Year Resident Tax Returns

In the year you move, you’ll need to file a part-year resident tax return for each state you lived in. However, you won’t be taxed twice on the same income. Each state will tax the income earned within its borders, and most states won’t tax income earned in another state. Your income will be split between the two state tax returns accordingly.

For instance, if you moved on June 30, the income earned before that date will be reported on the return for your previous state, and the income earned after that date will be taxed by your new state.

If you received interest or dividends that were paid out evenly over the year, you’ll allocate that income based on the time spent in each state—50-50, for example, if you moved halfway through the year.

Alternatively, if you know exactly how much income you earned in each state—such as closing an account in your old state and opening one in the new state—you can report the exact amounts on each state return.

Some states require you to report all of your income for the year if you were a resident at the end of the year. If this happens and you’ve also reported some income to your old state, you may be concerned about paying double tax.

But don’t worry! In such cases, you can claim a tax credit on your new state’s return for taxes paid to your old state on the same income. This tax credit will help offset any double taxation on that income.