I live in MT. I exercised a stock option in 2017 and the stock broker paid Oregon state taxes. I will need tax back from OR to pay MT. Can Turbo Tax handle this?

[tombecker1150]

I received a stock option in 2007 when I was living and working in Oregon.  I moved to Montana in 2014 and exercised the option last year (2017).  The stock broker paid Oregon State tax.  I need to get the taxes paid to Oregon back and pay Montana tax.  Can Turbo Tax handle this?

[TomYoung · Accepted solution]

"I need to get the taxes paid to Oregon back..."

Maybe, or maybe not.  Most states that I'm aware of claim as theirs the "compensation" created by the exercise of a NQSO that was granted while you worked in that state, even if you no longer live in that state when you exercise.  I don't know that Oregon, specifically, takes that stance but the fact that the broker withheld Oregon taxes suggests that they do.  (Having a broker withhold taxes is a pretty rare event, usually caused by either not submitting a W-9 or stating on that W-9 that you ARE subject to "backup withholding.")

The typical way of handling a situation like this is to prepare two state income tax returns.  First prepare your Oregon state non-resident income tax return.  If you end up with an Oregon state income tax liability then you'd take that tax as a credit against your Montana income tax return, more or less eliminating the "double taxation" issue.

Tom Young