I just received a 25,000.00 distribution from my father's...

A fellow caregiver asked...

I just received a $25,000 distribution from my father's trust fund in the state of RI. I am a NY state resident. What tax form will I have to submit to the state of RI, and what percentage of the $25,000 will I owe the state of RI?

Expert Answer

Barbara Steinberg is the CEO and founder of BLS Eldercare Financial Solutions, which specializes in helping families pay for long-term care for their loved ones. A registered financial gerontologist, she speaks regularly on the topic of paying for long-term care and is a financial expert for Caring.com.

Since the trust fund distribution was earned in the state of Rhode Island, you will need to file a tax return there. The form you need is Form RI 1040NR. NR stands for non-resident. You will also need to fill out Form 1040NR RI Schedule III. This form takes the taxable income from your Federal 1040 return and allocates the portion that was earned in RI. The tax due to RI is calculated here.

When you prepare your New York State income tax return, you can claim credit for the tax paid to RI. The form for doing this is NY Form IT-112-R. This for a New York State Resident Credit. It allocates your total taxable income between NY and RI. You will only pay NYS tax on the portion that was earned in NY.