Hello Marilyn,
Thank you for your reply.
Earlier today, I was able to talk with a TurboTax CPA about the proper use of this subtraction in our situation. After doing some research, he advised that Virginia tax law does not exclude nonresidents from claiming a subtraction for retirement plan income taxed by other states. He concluded we should include this retirement income subtraction in our return.
Perhaps this explains why TurboTax’s Virginia nonresident return prompts one to enter this subtraction (and does not offer an opportunity to reverse it) before calculating the percentage of Federal income attributable to Virginia.
The TurboTax software automatically imports all Federal income into the Virginia nonresident return including retirement income taxed elsewhere. The program then offers a long list of potentially available subtractions from Federal income, including this one. Income attributable to Virginia is not entered until after these subtraction questions are answered.
Thanks again for getting back to me. I guess this answers our questions for now. This is definitely an area needing clarification in TurboTax’s nonresident Virginia program.
