If the wrong state income tax was withheld from your 1099-R, you will have to file a nonresident income tax return for that state, to get that money back.
The first thing you want to do is make sure you've filled out the Personal Info section correctly:
After you finish your federal return, you'll automatically move to the State Taxes tab, where you'll see your nonresident state(s) listed in addition to your resident state.
To ensure accurate calculations, we strongly recommend preparing your nonresident state return before you prepare any resident or part-year state returns. More tips:
On the Indiana return, the withholdings form 1099-R, line 11 on the Tax Payment worksheets shows the amount correctly. This was the amount the IRA company sent to Indiana in error. However, the end result is $0 refund. Shouldn't it be the full amount on the 1099-R?
Not necessarily, Indiana taxes non-resident income earned from Indiana sources.
You need to make sure that you are doing the Indiana return first, before you do your home state return. If you did it out of order delete them both and then start over.
Indiana has reciprocal agreements with several states and if yours is one of them (Kentucky, Michigan, Ohio, Pennsylvania or Wisconsin) then you may not have to pay any taxes in Indiana at all.
Either way if you do have to pay taxes to Indiana for the income that you earn there then your home state will give you a credit on your state tax return for the amount that you pay Indiana. That's why you want to do the Indiana return first.
I deleted both Wisconsin and Indiana states from turbotax and did Indiana first.
NO change. Still shows $0 refund from Indiana.
Again, I did not earn any money from Indiana employment. TD Ameritrade paid Indiana over $1000 in state withholding by error. Their error and they admit to the error.
The Form screen, IN state, Tax Payments Worksheet, line 11 Withholding on form 1099-R, and line 14 Total Income Tax withheld shows the CORRECT 1099-R amount of over $1000.
Yes, you should get the full amount of the refund. If the Indiana (IN) return is not allowing you to make an adjustment to the income you can follow the steps here to correct the tax return.
When you are in the federal section of your return and on the Form 1099-R screen, make sure your state income amount is zero (Box 16) but leave the withholding amount in Box 14.
The key is to make sure the tax returns are accurately reflected and reported. This will not create any issue for you and it will properly allocate the income and the withholding.
Please update here if you need further assistance.
Yes. Everything is correct as you stated.
On that 1099-R the line 14 shows the correct amount and line 16 is blank.
As I go through the Indiana (IN) return with your scenario of retirement and IN withholding you will reach the screens below. You must enter a zero where indicated and you must select the County of 'Out-of-State - WISCONSIN'. Once you reach the end you will see the IN refund of the full amount. In my example the withholding was $100.
Next, I notice at the top of the return you will see one state, then use the arrow to see the other state return result. It will also show the refund for IN when you click the arrow.
The screens are filled out exactly like your example but my refund is still $0.
I deleted both state returns and started from scratch.
Checked all the Federal info and went to IN.
The Tax Payment worksheet form shows the $1000+ in line 11, Withholding form 1099-R.
IN comes up as Reciprocal Nonresident. County of Employment is "Out of State - WIsconsin"
Income from Indiana Employment is $0
Refund is still $0
I would like you to try to clear any cache and cookies since I did not have the same issue. Also I will provide the preview and print instructions so that you can actually see the forms. You should not have to delete the state returns again.
Computers remember pieces of information that we want them to forget and sometimes this can cause nonsensical issues.
You can view your entire return or just your 1040 form before you e-file by using the steps below and we have a video at the link:
Yes, I deleted cookies and cleared the cache. Exited TurboTax, restarted, deleted the states and started with IN first before WI, etc, etc.
I'm not sure what printing the forms will do when I can view them on the screen.
This is what is showing up on the Indiana Tax Payment worksheet, which is correct per the 1099-R that was incorrectly sent to IN instead of WI.
Yet, my refund is still showing $0 for Indiana.
I see the sheet in the IN tax return you posted which is the Tax Payments worksheet in TurboTax CD/Download program. I have the same one in mine and it looks exactly like yours except my test amount is again, $100. You will not see a refund or balance due on this page.
You must look at the Form IT-40PNR which is the actual tax return for IN. I have added the screen images for you to review when you are in Forms in your version of TurboTax. Hopefully this will show you your refund. I have added a couple of the screen images towards the end of the IN interview.
OK, may be on to something.
Form IT-40PNR is blank. Not in my tax forms. I searched for it, found it, it's blank.
Where in TurboTax would it trip the trigger to fill it in?
OK, Ignore that last posting.. I do have the Form IT-40PNR in my Indiana taxes but it is NOT showing the $1025 from the 1099-R.
It would seem to me that the 1099-R may have something wrong. I would take down all the information for that document (or use your physical document) and then delete the form. Do a quick review, then add it back to your return. Sometimes it's something that simple.
Last resort: Also, you can right click on the withholding to override on the Tax Payments worksheet, likewise you can override on the IT-40PNR on the overpayment line. You should be aware that the TurboTax guarantee would be void with overrides. You can cancel the overrides the same way.
Please update if you continue to have an issue.
Where do you see the BOTTOM of this screen shot???
The Tax Payment sheet shows the $1025.. I added a W2 with $44 dollars to the IN taxes and it is working just fine showing me I have a return of $44 dollars. Somewhere, it isn't linking the $1025 with a 1099-R.
The bottom of the screen in my image is starting on line 12 of the IT-40PNR tax return. Check that in your return to see the actual refund/overpayment amount.
The Form IT-40PNR is the actual nonresident tax return, the bottom image starts on line 12, of that form. Click on that form in your list under IN in Forms mode.
[Edited: 02/11/2022 | 12:48p PST]
This is what I have for the worksheet that pulled the $1250 from the 1099-R, and the Form IT-40PNR.
I would happily overide the numbers but where on the Form IT-40PNR is it pulling a 1099? It just shows the W-2.
The reciprocal agreement is only on EARNED income, such as wages.
According to the State of Indiana:
"Five states have a reciprocal agreement with the state of Indiana. They are Kentucky, Michigan, Ohio, Pennsylvania, and Wisconsin. All salaries, wages, tips, and commissions earned in these states by an Indiana resident must be reported as if they were earned in Indiana."
According to the state of Wisconsin:
"Reciprocity applies only to income earned as an employee. Income earned as an employee generally includes salaries, wages, commissions, and fees. Reciprocity does not apply to other types of income"
"Wisconsin currently has reciprocity agreements with four states: Illinois, Indiana, Kentucky, and Michigan. These agreements provide that residents of these states working in Wisconsin will be taxed on income earned as an employee by their home state and not by Wisconsin."