DavidD66
Expert Alumni

State tax filing

To properly calculate your state taxes in TurboTax when living in one state and working in another, you should first prepare your out of state tax return (South Carolina, in your case) and then prepare your resident state (North Carolina in your case).  North Carolina will tax you on 100% of you income, regardless of what state you earned it in.  South Carolina will tax you on your income earned in South Carolina.  North Carolina will give you a credit for the tax you pay to South Carolina (or any other state) so that you are not subjected to double taxation..

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