If you complete your nonresident state return first and the only income taxed, which is the rental income in your situation, then TurboTax knows when you do your resident state return how much income and tax was paid to the other state. This will allow your resident state to provide the credit for taxes paid to another state on the same income.
Carefully review the MT return so that you know you have only the rental income included. Sometimes the questions are reverse in word such as 'Not MT income' versus simply 'MT income'.
The credit for taxes paid to another state on the same income is used on your resident state because they do not want you to pay taxes twice on the same income. As the resident state all worldwide income must be included.
The credit for tax paid to another state on the same income will be the lesser of:
- the tax liability actually charged by the nonresident state, OR
- the tax liability that would have been charged by your resident state
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