Your resident state taxes all income but gives a credit for income taxed by another state. MA will automatically add all W2 state money together to be taxed. The employers have already sent the states a copy of your w2 information. The states know what you have earned. The program is where you correct the w2 information to reflect your situation.
If all of your income was earned in RI, only enter RI and income on the W2 screen.
If part was MA and part RI, enter both states and the amount earned in each state. Your w2 state section in the program does not have to match your w2. It should match real life.
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.
If either state questions you, show them the other state return and that all income was taxed. Most states talk to each other over these situations so you probably won't have any communication.
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