I'm getting taxed in the wrong state for my rental property income

[joeabrams026]

Home state: CA
Rental State: CO

I entered the rental details on Schedule E, but turbo tax is taxing me in CA and not CO.  I believe I have to pay taxes on the rental in CO (and not CA).  How can I fix this?

[MaryK4]

You must file a nonresident Colorado state return to report your rental income to Colorado.

As a California resident, you must also report your rental income on your state tax return, but you will get a credit for any tax you paid to Colorado so you will not be taxed twice on the same income.

[joeabrams026]

Thanks for the reply.  TurboTax *is* filing a nonresident CO return for me, it's just that I'm paying 0 taxes, when I should be paying a little more than that.  I looked on the final CO return and see 0 in the box for entering royalty/rent income earned in CO (box 17), when I believe it should be non-zero.  I've marked the rental address as being in CO, so why isn't TurboTax considering that as a CO income source?

[MaryK4]

Go back to the Colorado section of TurboTax and look for the Colorado Portion of Rental or Royalty Income (see below) and make sure you have the correct Colorado amount.  

Please let us know if this does not work.  @joeabrams026

[asaullo]

I collect rent in two state turbo tax is posting to only one state

[DawnC]

If you have rental income in a state(s) other than your resident state, you will need to file nonresident returns for those states.   When you go through the state nonresident returns, you will be asked how much of the rental income on your federal return belongs to that state.   Enter all of your rental income and expenses on your federal return, and then go through each state return and allocate the rental income and expense to each state, as applicable.  

Your resident state will tax all of your income, but they will usually give you credit for any tax you pay to another state.   Prepare your nonresident return(s) first, before you prepare your resident return.  

How to File a Nonresident State Return

@asaullo 

[PhyllisRollins]

That’s not the issue!  The problem is TURBOTAX IS getting it backwards.  How do we fix it?  I think it is bc my 1099 k shows  my residence state and not the state where my rental properties are located. Grrr

[PhyllisRollins]

I AM filing a nonresident return but TURBO TAX is deducting the income that is taxable.  I think it’s a problem with my 1099 k that shows my residence state.  I think TurboTax is reading that as where the properties are located.  How do I correct?  Lie about what state the 1099 k says since it is wrong?

[JamesG1]

Am I understanding your situation correctly?  If I am not understanding correctly, please advise.

You are a resident of state A and you own one or more rental properties in state B, a nonresident state.  Some portion of your rental proceeds have been reported to you on an IRS form 1099-K.

If the above is correct, state B has a claim on the rental income within its borders.  State A will also claim the rental income as your resident state.  State A may allow a credit for taxes paid to another state.

You may consider reporting the IRS form 1099-K within the rental activity.  You may consider reporting under Cash, check, and electronic payments rather than Form 1099-K if you believe that the entry is disrupting your tax return.

@PhyllisRollins