How do I make TT recognize which parts of the total federal income are coming from different states? My daughter retained NM tax residency while doing a graduate degree in California (in CA only ...
See more...
How do I make TT recognize which parts of the total federal income are coming from different states? My daughter retained NM tax residency while doing a graduate degree in California (in CA only for educational purposes, no in-state tuition rate, lived on campus, drove our NM-registered car with her valid NM license, voted in NM, bank account in NM). She finished in summer 2025, moved to MA for a job, and officially became a resident there in mid-August. While a non-resident in CA, she received a fellowship reported on a W-2 with CA taxes withheld, and of course after she became a MA resident, she received pay with MA tax withheld on a W-2 from her employer there. After preparing her federal return in desktop TT on Windows, I prepared her CA 540NR, then her MA Form 1-NR/PY (part-year resident there too), and then finally her NM PIT-1. NM taxes residents on their full income *while they are tax residents*, and in past years as a student the TT worksheets for NM have always offered me one for the PIT-B to apportion the income between NM and other states, and another worksheet to calculate the credit for taxes paid to CA (which goes on line 20 of the PIT-1). As a result, she only owed NM the difference between what the two states assess. This year, even though TT knows that she was a CA non-resident, has the data in the completed CA 540NR, and knows the exact date she ceased to be a NM resident and became a MA one, it is giving me fits. On the NM "Wages, Salaries, Tips" screen, it showed her total federal income for the whole year and then defaulted to deciding that $0 was taxable by NM, which is incorrect. So I specifically entered the amount of CA non-resident income as NM income, i.e. without the MA portion of the federal total (not taxable by NM). Despite this, TT does the NM return incorrectly in two ways: 1. On the PIT-1, it starts with the total federal income for 2025, but never adjusts for the fact that some of this, from MA, is *not* taxable by NM because she was no longer a NM resident when it was received. 2. The PIT-B shows a column for federal and a column for NM, but not one for the CA income. Then it completely skips over the credit for CA taxes paid, which is supposed to be calculated and entered on line 20, so it charges her the full amount of NM tax on that income. Nowhere in the Forms view is there a worksheet for the line 20 credit, and it is not attaching her CA return with the NM one, as required to support the credit. How do I make TT understand that the NM-taxable income was from the CA return, so that the apportionment and credit for tax paid to CA can be handled properly? Is there a way to manually force it to generate the tax credit calculation worksheet? And why is it trying to tax her entire federal income when some of it is from after she moved to MA, and it was given the subset amount that NM should work with? This is very frustrating, and has not been a problem in previous years.. Thanks for any pointers.