If you move from one state to another and the allocation of income between the two states on form 1099-R is incorrect, what do you do?

On state tax returns, how do you correct erroneous income allocations that were reported on 1099-R forms.

posted

It is hard to get compliance from most state departments of revenue when you report income differently from what is reported on a form 1099-R. If you do attempt to do this, you can either attach a statement to your return explaining the departure and justification thereof, or you can wait to see if you get a notice of adjustment from the state after you file your tax return and then protest the adjustment.

Also, keep in mind that most states offer a credit for taxes paid to another state on income taxed by both states, so you won't necessarily suffer a hardship from income allocated improperly by virtue of the entries on your form 1099-R.

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