As you go through the RI screens, it asks about wages earned in RI. You enter the RI amount. Continue through with business income, etc, entering only RI amount in the boxes. It lists the federal amount beside them.
For example, the numbers are bizarre and for illustration purposes only:
- Earn $1,000 in RI and earn $9,000 in MA
- RI says you earned 10% in RI (because 1k/10k is 10%)
- RI taxes you 10% of the liability on the full amount of $10k- total earnings.
- RI tax on $10k is $800
- Your tax would be $800 x 10% = $80.
After you prepare the RI return, then you do the MA return.
Your resident state taxes all income but gives a credit for income taxed by another state. Please carefully follow these directions.
You will need to prepare the states in a special order. You may need to delete both states and begin again.
- First, prepare your non-resident return. This creates your tax liability for the non-resident state. How do I file a nonresident state return?
- THEN prepare your resident state return and it will 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.
It isn't possible for the program to create a credit before it knows the liability. Your returns may be wrong if you do not prepare the states in this order.
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