- Mark as New
- Bookmark
- Subscribe
- Subscribe to RSS Feed
- Permalink
- Report Inappropriate Content
State tax filing
This may be a little confusing, but it appears everything is working properly. Though it may appear all your income is being taxed by MN, that is not the case.
First to eliminate potential display gaps, if you are working mobile use a browser vice the app. Sign out of your TurboTax account and clear your browser cache. Here is a link that may help if you need.
Then sign back in and return to your MN state interview.
Any tax form like a W2 that you entered in the federal interview that has indicated it is MN income, like Box 16 on the W2 will automatically show up in the MN allocation column. However all other income you have entered will also show up on the allocation page, but will not be in the MN column.
Next, the way MN taxes non-residents is they first treat you like a resident, taxing all income from all sources. That is why you will see your MN taxable income that includes even your income. MN then divides the total taxable MN income by the MN allocated income to arrive at a percent. The resident tax on the entire MN taxable income is then multiplied by that percent to arrive at the non-resident tax.
Here is an example (the numbers are made up for illustration only). You have 100,000 self-employment income that is all in your resident state of IA. Your spouse has 50,000 W2 income from MN (box 16 on W2). So the total FED Adjusted Gross Income is 150,000. From that number, MN subtracts their standard deduction and any personal exemptions (the same as MN residents). The new total is 90,000 called MN taxable income. The tax on 90,000 is 1000 in MN.
Your MN allocation is 50,000 so 50,000/90,000 is .55555. The 1000 MN tax is multiplied by .55555 to arrive at $555.55 which is the non-resident tax on 50,000.
To test/compare in the "My Info" section, you might change you and your spouse to MN residents with all your income entered to see the MN tax on all income.
**Mark the post that answers your question by clicking on "Mark as Best Answer"