How to split capital gains distribution between two state returns since we moved mid-year? My 1099-DIV doesn't give the date that the capital gains distribution was made.

[Classic-Century]

Since I'm not sure what date the distribution was made, I'm not sure if I split it in half and put half on our NY return and half on our IA return? We moved to IA from NY on 7/28/2015.

My question would also apply to how we handle the interest income from banks. Thanks!

[AnnetteB · Accepted solution]

In the case where you are filing part-year returns for two different states due to a move during the year, certain income and deduction items must be allocated between the two states.  Sometimes this allocation is obvious, other times it is not. 

When doing your allocations, you can choose any of the following methods:

1. Go by the income you earned while you lived in the state
2. Go by the time you spent in the state
3. Go by an association with the state

For items such as capital gains distribution and bank account interest where it is not obvious when the income was earned or it was spread out throughout the year, allocating it by the time spent in each state is probably the best method to use. 

In your case, 7/12 of the amount would be allocated to NY, with the remaining 5/12 of the amount allocated to Iowa. 

[ScubaGT63]

@AnnetteB 

 or anyone else

 im in turbotax now doing just this 

 i found a turbotax worksheet under NJ (where i was a partial year non resident working there) allowing to prorate interest and dividends but cannot locate anywhere to do same for capital gains distributions 

please advise

[MarilynG1]

In New Jersey, in FORMS, look for the worksheet 'Net Gains or Income from Disposition of Property'.  You check the box at the far right of each entry to exclude it from NJ income.

@ScubaGT63 

[ScubaGT63]

PERFECT THANK YOU  @MarilynG1 

i have to say how incredibly impressed i am with the TT experts on this community- such quick answers-- it is a fantastic resource and you all do an incredible job

meanwhile i had called up on the help line  (new feature with TT download premier advantage- to get live help) and did not get as speedy an answer in fact the lovely lady i spoke to did not know the answer but while we were trying to find it i actually located the form you mentioned in your e mail but that was after a long phone call 

 in short THANK YOU and to all the experts who respond so rapidly- incredible

So  yes i marked a  cross as shown and lower down on that form,  under capital gains distributions multiplied the total amount by 8/12 for 8 months of year but although the capital gains/ losses are not allocable at all to NJ they need to appear in "elsewhere" so at antoher form (cant recall which) I  allocated the capital losses and gains accordingly  so that only 8/12 of the annual amount showed in the "elsewhere" column of NJ NR tax return since i was a NR but also only a partial one

NOW EVEN MORE IMPORTANT: A  follow up question- im hearing from other experts (Tom D8 for example) that while my company had me as a NJ employee in their database and thus took NJ withholdings until sept 1st 2023, when they officially moved my work place to Utah and established me officially as a remote worker (we have a company office in Utah),  that since i was actually physically in utah  for the entire year and not in NJ)  i actually don't owe NJ taxes (even though my company had me " listed" as a NJ employee and took withholdings--... and that this is because of something called the the convenience of the employer rule which Tom noted Utah does not have

however i just looked up convenience of employer rule for NJ and it seems to indicate I do owe taxes to NJ since

"Under the convenience rule, a nonresident taxpayer’s employee compensation from a New Jersey employer for the performance of personal services is sourced to the employer’s location (New Jersey) if the employee is working from an out-of-state location (e.g. at home in their resident state) for their own convenience rather than for the necessity of their employe"

so i hope TomD8 sees this and comments again and curious what Annette thinks also

can you confirm that

that would be amazing- a further refund of the 8 months of withholdings taken but my read per what i pulled up is that its the rul for NJ rather than Utah that counts.... what do you think?

@TomD8 

@MarilynG1 

@AnnetteB 

i somehow thought the company who employs me determines my work state (NJ for 8 months-- i was NR) then utah for  last 4 months) even if i am not physically there

 please advise

@TomD8 

[BillM223]

So, did your company want you to work from Utah (since you have a Utah office, it's a reasonable question)? If yes, then you owe NJ.