Important Notice for Part-Year NC Resident taxpayers:
TurboTax for NC State tax return misses a wage allocation code for PY NC Resident Income or PY Not NC Resident Income. In NC, we need to allocate the amount of PY NC resident income in D-400 Schedule PN box1, Column B. We exclude the amount in PY Not NC Resident Income because that income is not taxable in NC if the income is not NC Resource. However, TurboTax for NC State Tax Return has two buggers in "NC Wages Allocation" section:
- For PY NC Resident Income, part of the income is not taxable in NC if that income is made when the income is made during taxpayers are not NC Resident, and the income is not from NC Resource. Therefore, in NC, "PY NC Resident Income" and "PY NC Source Income" are not the same: all of "PY NC Source Income" are taxable in NC, but only part of "PY NC Resident Income" are taxable in NC. TurboTax doesn't distinct them, and led to or lead to taxpayers paying more tax in NC
- When TurboTax fill in the form, D-400 Schedule PN, on box 1, TurboTax will take the wage amount from Federal (W-2 box 1) to fill in Column A, but take the wage amount from State (W-2 box 16) to fill in Column B. Because the amount in W-2 box 1 might not be the same as the total amounts in W-2 box 16, so when TurboTax calculate the percentage of the NC Resident income rate (NC Income / Total Income), TurboTax might get a wrong percentage number in box 24 of D-400 Schedule PN and also in box 13 of D-400. Since in many case, total State Income (from W-2 box 16) are more than Total Federal wage (W-2 box 1), therefore, TurboTax makes Part Year NC Resident taxpayers pay more NC state tax.
