Nonresident income is income from another state you didn't live in
during the year, and includes any of the following:
- Wages or income from a state you're not a resident of,
- Rental income, gambling winnings, or sold a home for a profit in a state
you're not a resident of,
- S Corporation business shareholder income from a business in another state,
- You are a partner in an out-of-state partnership,
- You are a beneficiary of a trust or estate that has an interest in another
state, or
- Your employer withheld state tax for the wrong state. Under most
circumstances, you’ll have to file a nonresident return to recover the
incorrectly-withheld taxes.
Notify your employer right away so it
doesn't happen again!
Filing a Nonresident State Tax Return
Make sure you prepare all nonresident returns before your resident
state return, to ensure proper calculations. Also, make sure you select the
state long form(s) even if TurboTax selects the short form(s) for you.
Tip: If you are preparing a nonresident state return
solely to recover tax that was withheld in error, enter 0 on the screen that
asks for the income earned in that state. This will eliminate your tax liability
for that state, resulting in a full refund.
If you live and work in a Reciprocal
State, you may only need to complete Step 3.
- Prepare your federal tax return first, then as you begin each state
return;
- Your federal return data transfers into your state return, and
- TurboTax learns that you need to file each state return.
- Prepare a return for the nonresident state(s). Only report the income
and withholdings from that state.
- Prepare a return for your resident state. You will report all of
your income, including income from any nonresident (or part-year) states.
- Take a credit for taxes paid to the nonresident state on your
resident state return so that you won't get double-taxed on the same income.
TurboTax calculates the credit for you, but you must select the
state's long form to get the option, even if TurboTax chooses the short form for
you.
Example: if you live in Kansas but work in neighboring Missouri, you
would file a nonresident Missouri return in addition to your usual (resident)
Kansas return. You'd then take a credit for any taxes you paid to Missouri on
your Kansas return
http://turbotax.intuit.com/support/go/GEN12109'>http://turbotax.intuit.com/support/go/GEN12109
