State tax filing

Going through the diagnostic copy of your return, there are a number of errors or issues that will need to be cleared before you will be able to file your return.  Here are some steps to take to fix and remove these issues:

1. Was there any interest income that should be allocated to NY? If not, enter zero on the Addition and subtraction allocations screens for NYS. This is found under Nonresident and PY resident adjustment allocations. I assumed NY portion is zero. 
2. Complete all the allocations necessary on NYS screens. If none, enter zero.
3. Remove the NYS portion of rental, royalties, partnership of -3,900. The federal income side shows 0, therefore, enter 0.  Remember, this is allocating what is being reported on the Federal return to NYS, not reporting something other than what is shown on the Federal return.
4. Enter your resident county on NJ return. 
5. Complete the Health Care Coverage section of your NJ return.
6. Review the foreign wages again. I’m assuming you don’t qualify for the exclusion and answered questions accordingly. Form 2555-T will be deleted. 
7. For wages and taxable SS benefits, I’m assuming zero was sourced to NYS. If so, enter zero for these fields.

Next, addressing your questions:

1 - Federal forms and worksheets show a loss of 6,403 for the NY property. If you have any passive real estate activity losses from a prior year, you need to go to the Rental Income and Expenses section of your Federal return and edit the Property Profile.  On the page titled, Do Any of These Situations Apply to This Property, check the box under carryovers for passive activity losses and enter the accurate information from prior years. 

2 - After you have entered any prior year unallowed losses on the Federal return, then that amount and the 6,403 unallowed loss from 2023 will both flow to the NY IT-182 form.

3 - It is not possible to see what the app is stating when you see your return, but the forms in your data file state that for NY state your adjusted gross income is zero. This makes sense if the loss is unallowed and there is no other income allocated to NY.  

4 - Form IT-182, Line 6 shows your federal MODIFIED adjusted gross income. It is calculating your federal AGI less taxable social security benefits. Since this amount is over the allowed limitation on the form, you do not qualify for special allowance with active participation. 

5 - To adjust your NYS carryover to a value that is different from the Federal unallowed loss carryover, enter the appropriate amount on Line 6 of Part II on the IT-182 worksheet. This will transfer to the IT-182.  This will need to be done in Forms mode using the TurboTax CD/downloaded version of the program.  There is not a direct entry for this amount in the step-by-step mode of the NY state return.

 @jnoelle 

[edited 2/4/2024 | 5:04 am PST]