I converted my traditional IRA to a Roth IRA in 2010 and deferred the taxes to 2011 and 2012 while living in California. I then moved to North Carolina in 2011 mid-year. I found the answer for California here:
https://www.ftb.ca.gov/professionals/taxnews/2011/February/Article_4.shtml
In Legal Ruling 98-3, Taxation of IRA Distributions Rolled Over to a Roth IRA Followed by a Change of Residence Status, we provided guidance as to the tax treatment of California residents who converted a traditional IRA to Roth IRA in 1998 and then change residence during the ratable period between 1999 and 2001, as well as the tax treatment of non California residents who converted an IRA to Roth IRA in 1998 and then become California residents in the period between 1999 and 2001. The analysis in this ruling remains applicable to the new deferral rule allowing taxpayers to report the income from the conversion of a traditional IRA ratably over the two years following the conversion.
Outbound taxpayers must include in gross income only those portions of the taxable distribution reportable under the two year rule before they became nonresidents. Under R&TC section 17952.5 the gross income of a nonresident does not include qualified retirement income including income from an IRA, received on or after January 1, 1996. R&TC 17952.5 prevents the imposition of California tax on the portions of the IRA distribution recognized after an individual becomes a nonresident.
California will allow for the proration of the taxpayer's income from the conversion based upon the number of days a taxpayer is within California during the two years of the proration. An individual who makes a rollover contribution from an IRA to a Roth IRA before January 1, 2011 and changes residency in 2011, must include in California adjusted gross income one half of the taxable portion of the distribution multiplied by a fraction, the denominator of which is the total number of days in the taxable year and the numerator of which is the number of days in the year in which the individual is a California resident.
If the taxpayer changes residency during the second year, the amount included in California adjusted gross income for the year of the change in residency is one half of the taxable distribution multiplied by a fraction, the denominator of which is the total number of days in the taxable year and the numerator of which is the number of days in the year in which the individual is a California resident.
I couldn't find anything like that for North Carolina. I imagine I should prorate it to mirror the California dates but would like to confirm this. It appears North Carolina did allow deferral in 2010.
