Active duty member with multiple states with income

[hcosey]

I thought I was all set with the turbo tax federal and states and went to double check the state and don't think Turbo Tax understands my answers to auto questions? I am a TX resident, on active duty orders and living in VA. I have an additional job in VA that I do need to pay taxes on. Turbo Tax only completed the process for my untaxable spouses income. So now I'm realizing this last minute and unsure if the information is correct. I need it to understand and fill out a 763 for myself, the active duty member. 

[DaveF1006]

It depends how you reported your income. There is a wage allocation screen in your Virginia state return you would only allocate your VA income.  For an example, if you reported W2 income of $105,000 total and $35,000 was earned in VA, you would record $35,000 as Virginia income.  See the first screenshot. 

it sounds like you made this allocation for your spouse but not for yourself.

Once all income is allocated correctly, you will have a properly filled out Form 763. To work on your state return, select the state taxes tab in your return.

[hcosey]

Unfortunately Turbo tax must have not considered this situation. No matter what I did the only form it would give was either a 763s for my husband only or the wrong form for us to file together. After a few hours on the phone with turbo tax their answer was that my version didn’t work with VA state and they sent me a new version and had me download it only to have the same issue. It was extremely frustrating. I will never purchase additional states through turbo tax because they obviously have not done due diligence to have my situation in the software. VA is also not the friendliest state to file taxes in active duty dual income situations.

thanks for trying 

[DMarkM1]

Yes. VA filing for nonresidents can be tricky.  According to the VA Department of Revenue, "A separate Virginia return MUST be filed if: ... both husband and wife are nonresidents and both had income, but only one had income from Virginia sources;..." 

In TurboTax products you cannot create a separate state return from a joint federal return.

It sounds like you now have a desktop product (CD/Download) which works much better for this situation. In your download product you can create the "Mock" separate federal return with only your income/deductions to allow the VA separate return. The "Mock" separate federal return will not be filed since you filed jointly at the federal level therefore you will need to print/mail the separate VA return.  

In your "Mock" separate return in the "My Info" section you will identify yourself as military and indicate you lived in TX (home of record) all year and no other states.  Still in the "My Info" section scroll down to "Other State Income" and answer "Yes" you made money on another state and select VA.  This will generate a non-resident VA separate return interview.

In the VA separate nonresident return interview you will be able to allocate only your nonmilitary income to VA. 

Going forward you can use a single desktop product to create/e-file your joint federal return (with any joint state returns required) and "Mock" separate federal returns that will allow any required separate state returns.  

Here is a link with more details on the process.

@hcosey