http://www.revenue.nebraska.gov/tax/17forms/f_1120sn_booklet.pdf see page 3-4 for non-resident 1120 Nonresident individual shareholders do not have to file a Nebraska individual income tax
return if:
u Their only connection with the state is the conduct of the business activities of the
S corporation; and
u The S corporation has withheld and remitted income tax from all the Nebraska income
attributable to the nonresident’s share of the S corporation’s income.
The full amount of the income tax withholding, at the nonresident shareholder’s option, is retained
in lieu of filing an individual income tax return. Any nonresident may still file a Form 1040N,
however, and claim a refund if one is due.
If you do believe based on the reading that you must still file a non-resident Nebraska return:
You will first complete your federal return. Include the S corp income. Make sure you have indicated that you have earned income from another state. Select the Personal Information tab. At the very bottom of the page make sure Nebraska is listed as other state income.
Select the State Tax tab. Complete a non-resident return for Nebraska. Use the Adjustments to Nebraska Income screen to back out the non-Nebraska items. Then you will do a non-resident Nebraska return.
Only after completing Nebraska will you file a CA state return. In CA you may get a credit for taxes double taxed on the same income during the interview.
I hope this was helpful?
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