That helped but I think its more complicated in my case since I believe Box 2 and 3 changes when I calculate the taxable amount for the second distribution I took in the new state I moved to. Is my thinking wrong?
I had two ESA's which distributed a total of $19K in 2023 and generated two 1099-Q's:
ESA1 distributed $3K while living in MA while I had $4K AQEE prior to July 31, Box 2=$2K
ESA2 distributed $10K While living in MA while I had $4K AQEE prior to July 31, Box 2=$8K
ESA1 distributed $0K while living in NC while I had $0K AQEE after July 31, Box 2=$2K
ESA2 distributed $6K while living in NC while I had $0K AQEE after July 31, Box 2=$8K
On the federal return TT allocated 16% of the $4K AQEE towards ESA1 and 84% of the $4K towards ESA2:
ESA1 Distribution/Total distribution = ($3K/$19K) = 16% (AQEE attributed to ESA1 per TT worksheet)
ESA2 Distribution/Total Distribution = ($16K/$19K) = 84% (AQEE attributed to ESA2 per TT worksheet)
Does this complicate the picture becaue I took a distribution in MA before I took a distribution in NC, so the BOX 3 value would be different for each state, plus I have to allocate the AQEE between two ESA's and two States? It almost seems like I have to generate two 1099-Q's for MA and two new 1099-Q's for NC, each with their own box 1,2,3 amounts. Moving between states changed the earnings/basis calculations for each state. Maybe NC needs its own 1099-Q's (Box 1,2,3 amounts) as though it was a new tax year when I moved there?
The more I think about it, why not just allocate the taxable income according to the proportion of distributions while living in each state. Assume total taxable distribution = $7K
taxable MA income = $7K*13/19 = $4.79K
taxable NC income = $7K*6/19 = $2.21K
