MonikaK1
Expert Alumni

State tax filing

Each state has its own laws, and some calculate the income allocation between states differently.

 

If you were a California resident all year, you would file a California Resident return and a Colorado Nonresident return.

 

Prepare the Nonresident Colorado return first. Only your income earned in Colorado would be taxed there. Note the tax liability for Colorado (not the withholding or the amount due with the return, but the actual total Colorado tax computed). Then, you may be able to take a credit on the California return for taxes paid to Colorado. California will tax you on all of your earnings including those from another state.

 

See also this TurboTax article and this one on multiple-state situations.

 

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