it depends. Try the steps below. When you have both resident and non-resident income, you must fill out the tax forms in a special order. Your resident state may tax all income but gives a credit for income taxed by another state. Please carefully follow these directions.
- First, prepare your Montana State return first. This creates your tax liability for the non-resident state.
- THEN prepare your resident state return and it should generate a credit for your income already being taxed in the non-resident state.
- The credit will be the lower of the state tax liabilities on the same income. You may owe your resident state.
The point it, it may appear you are being taxed for all your income in both states but if the income is allocated correctly, you will receive credit for taxes paid in Montana in your resident state.
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