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kemccready
New Member

Began 2016 in MS. Retired 4-01-2016. Relocated to NC 6-15-2016 without gainful employment. Income was SS & IRA's. Please advise my tax exposure for NC.

 
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SteamTrain
Level 15

Began 2016 in MS. Retired 4-01-2016. Relocated to NC 6-15-2016 without gainful employment. Income was SS & IRA's. Please advise my tax exposure for NC.

All income before you moved to NC is MS Part-Year income and is reported & Taxed on the MS Part-year income tax return.  (don't know how MS taxes IRAs or SS)

All income after you moved to NC is NC Part-year income. NC taxes all IRA and pension income (unless the pension income is from a Federal/Military pension where you were 5 years vested as of 12 Aug of 1989) , but not SS income.  Also taxes any interest or investment income you received after moving.

In the Personal Info section of the software you will put in "NC" as the state you lived in on 31 Dec 2016, and then indicate you moved from MS and the date you moved.   That will trigger the MS and NC Part-Year tax forms.

DO NOT even attempt to go into either of the state tax forms until you have ALL your federal income and ALL your Federal deductions and credits entered sometime in late February.  

During the interview on the NC part-year tax return, you will be required to allocate what income you received after you moved to NC.  So get monthly statements from all of your Bank and investment accounts....so you know when you received $$ relative to your move.  You will be able to tag the MS W-2 you will receive for the work you did before you moved, as "Not NC-Income" during the NC interview,  then the IRA income has to be allocated...if you withdrew all of it after you moved, then all of the IRA income is NC income....if part before and part after, then you need to allocate those $$ during the NC part-year allocation questions.  NC uses ALL of your yearly income to start with, and then applies the various deductions and additions and exemptions to calculate a total taxable income,....and then multiplies that total taxable income by the % of your gross that was earned while you lived in NC...to get a final NC-Taxable income to tax.

(Don't know how MS does theirs....expect similar)

Plan to spend several weeks on it AFTER you have all of your federal tax file completed...print out after each session and review it closely for errors, or simply to try to understand how it is being done.  The more you review it, the more you will understand how the tax forms are doing things, and then you readjust your income allocations to correct them 

You should be using the Desktop software, since it is easier to review without printing out since it has a "Forms Mode" to look at the forms.  This year will be a nightmare...next year (if you remain in NC ) will be easier..

____________*Answers are correct to the best of my knowledge when posted, but should not be considered to be legal or official tax advice.*

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2 Replies
SteamTrain
Level 15

Began 2016 in MS. Retired 4-01-2016. Relocated to NC 6-15-2016 without gainful employment. Income was SS & IRA's. Please advise my tax exposure for NC.

All income before you moved to NC is MS Part-Year income and is reported & Taxed on the MS Part-year income tax return.  (don't know how MS taxes IRAs or SS)

All income after you moved to NC is NC Part-year income. NC taxes all IRA and pension income (unless the pension income is from a Federal/Military pension where you were 5 years vested as of 12 Aug of 1989) , but not SS income.  Also taxes any interest or investment income you received after moving.

In the Personal Info section of the software you will put in "NC" as the state you lived in on 31 Dec 2016, and then indicate you moved from MS and the date you moved.   That will trigger the MS and NC Part-Year tax forms.

DO NOT even attempt to go into either of the state tax forms until you have ALL your federal income and ALL your Federal deductions and credits entered sometime in late February.  

During the interview on the NC part-year tax return, you will be required to allocate what income you received after you moved to NC.  So get monthly statements from all of your Bank and investment accounts....so you know when you received $$ relative to your move.  You will be able to tag the MS W-2 you will receive for the work you did before you moved, as "Not NC-Income" during the NC interview,  then the IRA income has to be allocated...if you withdrew all of it after you moved, then all of the IRA income is NC income....if part before and part after, then you need to allocate those $$ during the NC part-year allocation questions.  NC uses ALL of your yearly income to start with, and then applies the various deductions and additions and exemptions to calculate a total taxable income,....and then multiplies that total taxable income by the % of your gross that was earned while you lived in NC...to get a final NC-Taxable income to tax.

(Don't know how MS does theirs....expect similar)

Plan to spend several weeks on it AFTER you have all of your federal tax file completed...print out after each session and review it closely for errors, or simply to try to understand how it is being done.  The more you review it, the more you will understand how the tax forms are doing things, and then you readjust your income allocations to correct them 

You should be using the Desktop software, since it is easier to review without printing out since it has a "Forms Mode" to look at the forms.  This year will be a nightmare...next year (if you remain in NC ) will be easier..

____________*Answers are correct to the best of my knowledge when posted, but should not be considered to be legal or official tax advice.*
kemccready
New Member

Began 2016 in MS. Retired 4-01-2016. Relocated to NC 6-15-2016 without gainful employment. Income was SS & IRA's. Please advise my tax exposure for NC.

Three years too late!

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