I also have this issue, but with the State of NC. I am a resident of IL and have investment property that is wholly located in NC. The partnership form in NC allows the Partnership to pay the tax on behalf of the non-resident partners, therefore I have no opportunity to allocate the HSA deduction to my NC income as the AZ non-resident individual has proposed. If my non-IL taxes were higher, I would be doing the override and fighting it with IL.
