My bank just got bought by a bank in another state. Does this mean my interest earnings are going to get reported in that other state and potentially require me to file tax returns in the other state?
How is this problem handled by big banks with branches in many states?
No. You owe/pay taxes based on your residency. The physical location of the entity paying you isn't relevant whether it's earned income or interest income.
There are some exceptions to this on an international basis. And, some states are aggressive in their methods of establishing residency but most involve you being physically present in the state over some time period.
Banks anywhere in the US report the interest you earn in a 1099-INT. You then report this income in your federal return, and in your home state return, if your state requires you to file.
I believe what you're alluding to is when you earn wages in multiple states (which would come in a W2 form). Only then you might need to file reports in multiple states.
If the bank is doing business in your home state and ofering bank accounts to residents of your home state, then there is no question that the interest they pay you is taxable in your home state and nowhere else.
