Yes, you will enter the W2 as you would any W2. You enter the NC and SC lines from the W2 into TurboTax; those entries will transfer to the appropriate state returns. Both states, NC and SC, will tax the short-term disability payments. As a non-resident, NC is taxing the NC source income and as a resident, SC is taxing all income from all sources.
However, to avoid double taxation, SC will give you a credit on the taxes you paid to another state, in this case NC.
NOTE: The same concept applies to your regular W2 as well. It is NC source income taxed by both states, but your resident state will give you a credit on the taxes paid to the non-resident state.
In the personal information section of TurboTax you will list SC as your resident state and indicate you had income from another state and select NC as that state. These steps will generate the proper resident and non-resident state returns.
When you start your state taxes, you will want to complete the NC non-resident returns first and take note of the total income that was taxed in NC as well as the tax paid to NC on that income. You will use those numbers in the SC interview in the “Taxes paid to another state” topic.
Here are a couple of links with more information on NC and SC taxable income.
NC taxable income
SC taxable income (see the “Income” section and the “Tax Credits” section)
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