You definitely need to explain your "residency" situation further:
1) if you were a part-year resident of NC, then NC calculates the tax on ALL your income, then reduces the tax based on the % of income earned in the two states. But you do have to go thru the full set of NC income allocation questions before it calculates the right numbers. If you are not getting a decimal digit in line 13 somewhere around 0.8...then you didn't fill in the NC income allocation questions properly....or are mistaken about your ratio.
2) If you were a full-year resident of NC, and worked out of state during the year...then it does calculate a tax on every scrap.....but....you get a tax credit for the taxes paid to the other state on their non-resident tax return. IF the other state does not have an income tax, then NC taxes it all with no credit. You do have to fill in the non-resident state tax return first.
____________*Answers are correct to the best of my knowledge when posted, but should not be considered to be legal or official tax advice.*
