If the Schedule K-1 packet you received includes information about states where the partnership generates income, you may need to file nonresident state tax returns for those states to report the income. Generally, you must file a nonresident return when earning income from sources in states where you do not live, such as:
- Out-of-state rental income, gambling winnings, or property sale profits
- S Corporation or partnership income
- Beneficiary income from a trust or estate
- Incorrect state tax withholding by your employer
To report the federal K-1, enter it on your federal return and indicate in the "Other State Income" section of TurboTax that you earned money in other states. TurboTax will transfer the K-1 information to each state return, where you can make any necessary state-specific adjustments.
Complete nonresident state returns before filing your resident state return to ensure you receive credit for taxes paid to nonresident states. Before filing, review or print your returns to confirm income isn’t duplicated across state returns.
*Note: Some entities may file state returns on your behalf. That information will be noted in the Schedule K-1 packet information. If that is the case, then they are informational and not reported in your individual return.
