I received oil royalties from OK but live in TX the amount was $1514. Do i need to file a OK state tax income?

[GeoffreyG · Accepted solution]

Your answer is no, you do not need to file a state tax return in Oklahoma, as a Texas resident, if your only Oklahoma-source income is $181 in oil royalties.

The following information constitutes instructions from the Oklahoma Department of Revenue.  It is an exact quote:

"Filing Requirements
Oklahoma resident individual(s) are required to file an Oklahoma income tax return when they have sufficient gross income to file a Federal income tax return. Nonresidents are required to file an Oklahoma income tax return when they receive gross income of at least $ 1,000 of Oklahoma source income."

Here is a link to the relevant government webpage, if you wish to verify that for yourself:

https://www.ok.gov/tax/Individuals/Income_Tax/Filing_Information/General_Information/

So, with under $1,000 in Oklahoma-source income, and being a nonresident, the OK state Department of Revenue says you don't need to file.

Of course, your royalty income is still reportable (and taxable) by the federal IRS.  You'll need to use a Schedule E for that, which is part of both TurboTax online Premier and Self-Employment software packages.  As a TX resident, though, you won't have anything to file, or report, or that is even taxable by the state of TX.  This is so because TX has no personal income tax system.

If you have further questions, encounter any difficulties, or just want to speak with a live tax expert who can walk you through your TurboTax entries (including the ability to screen-share with your computer), please feel free to contact us.  We would be happy to help you (and as a paying customer, the call is free to you).  Here is a link where you can create a support ticket and reach us:

https://support.turbotax.intuit.com/contact/

Thank you for asking this question.

[john9]

This answer is incomplete.  Oklahoma withholds 5% of all non-resident royalty income.  You do not need to file but then you also will not be able to get back any withholdings from the income.  Therefore, the above answer is incomplete.

[jameskelly2]

Is the answer above the same for Turbotax Deluxe on oil royalty from Oklahoma and I live in Kentucky?

[lshioleno]

If I file a non-resident OK state return, is the tax amount for the royalties refundable?

[DMarkM1]

Yes,  The royalty income is below the OK standard deduction so you will not have OK taxable income.  Any taxes withheld should be refunded when filing your non-resident OK return.  

[ljshioleno]

Thanks so much

[april-orgren]

Just to be clear, the tax that is Oklahoma Income Tax withholding is refundable.  The wellhead severance tax is not.