Ignore the MT tax display for the moment...until you get every scrap of Income and every scrap of Deductions& Credits entered entirely in the Federal section first. The federal section needs to be completely done and error checked first...even then, that MT number is meaningless until:
1) The Federal section is fully filled out (as noted above)
and then
2) ...you've then run thru the entire MT interview to go thru the MT income allocations for a non-resident.....only at this time will you indicate what sub-portion of your Federal income entries are MT income (your work income in MT), and most everything else is a zero... (unless you own a rental property or business in MT). This is the point at which your MT tax will/should be cut down significantly.
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#1 first, then #2, and it should work out OK. Make sure you print out your tax file BEFORE you actually file to see if it makes sense then. In particular, check page 7 of the MT Form 2. In the Non-resident Ratio section, line 18 is a decimal number (lower than 1.0) that approximates the ratio = (MT-only income divided by Gross income) .
For a non-resident, MT first calculates a tax based on your full income from everywhere...and all your possible MT Deductions&Credits etc, then reduces the full tax by the decimal calculated as I noted above.
"Some" of your Military retirement may be included in that gross income if your Federal AGI is over 34,820 (Calculation on page 5 of the MT Form 2).
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Get #1 above done first....then #2...then print out your MT forms and see if the calculations on Form 2, pages 7 and 5 make sense. IF not, make sure the Federal is fully filled out...then run thru the interview for the MT income allocations again...and repeat until the PDF/printout looks about right.
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____________*Answers are correct to the best of my knowledge when posted, but should not be considered to be legal or official tax advice.*
