I am assuming you moved from one state to the other.
When you move during the year, you are taxed by each state only on the income you earned while you were a resident of that specific state.
- You will file as a part-year resident in Alabama.
- You also file as a part-year resident in North Carolina.
The process of dividing your income between the states is called Allocation. When you complete your State returns, TurboTax will help you determine the portion of your total federal income that should be allocated to each state.
- Wages from a W2 are usually split by the dates you lived in each state. Your W-2 boxes 15-17 should already show a breakdown, but you may need to adjust if they are incorrect.
- Interest/Dividends are generally taxed only by the state where you lived when you received the payment.
Let us know if it's a different situation than moving from one state to the other or if you have questions on how to split income beyond wages, interest and dividends.
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