While the tax rules vary from state to state as to what income is taxable and what is not the rules on how to handle it in TurboTax are pretty simple.
Start with preparing a return for the non-resident state. Since TurboTax is assuming that all of your income is taxed to your resident state you will have to tell the system what income is taxable to the non-resident state and what income is not.
Once you have completed the non-resident return and all of it is set properly then you proceed to the resident state tax return. Depending on the state you will either tell it not to tax the income from the other state or allow it to tax the income as well but take a credit for the taxes paid to the non-resident state. Either way prevents double taxation.
It'll all be fine as long as you make sure to do the non-resident state first. If you have already started something different then you will need to delete any state returns and start over.
@vankurtz
@vankurtz
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