Question by notshyviolet: Gambling winnings and state tax question?
Okay, so gambling winnings must be declared as taxable income for federal and state taxes.
What happens if you happen to win a big prize on the exact same day you move from one state to another? Which of the 2 states do you pay state income tax to? Are you stuck paying to both states?
State A you lived in the first 5 months out of the year. State B you lived in the remaining 7 months.
Again, the taxable income (value of the winnings) was incurred on the exact day you moved from State A to State B.
Edit – more accurate time would be to say that we lived in State A for first 4 1/2 months of the year, and State B for the remaining 7 1/2 months of the year.
Saying that is unlikely to happen does me no good because this actually DID happen to me.
The money was won in State B. But State A is sending a tax bill to me 2 years later saying that we owe them a substantial amount of money for that prize. (The IRS and State B have already been paid.)
Answer by PepsiLime
I would think it would be the state that you were at the end of the day.