topic State Taxable Income Incorrect in State tax filing

State Taxable Income Incorrect

NuTTyTaxMan — Tue, 10 Feb 2026 09:32:50 GMT

In my specific case, it's North Carolina, but I have talked to others in other states that are having this same issue.

I lived in North Carolina all year, but the stock I was awarded in CA vested, so I had CA Income and had to pay CA Tax.

For ease: (Fake Numbers)

- FIT Taxable: $50,000

- CA Taxable Income: $25,000

- NC Taxable Net Income: $50,000

Shouldn't the NC Taxable net income be $25,000 since half of the money I made was in CA and I was taxed? Why would NC get to tax it again?

Re: State Taxable Income Incorrect

KrisD15 — Thu, 25 Jan 2024 00:44:12 GMT

North Carolina will claim that income since you are a North Carolina resident.

You must claim all income.

North Carolina also gives you a CREDIT for that tax you paid to California.

So, although it looks like you are being taxed by North Carolina on all your income, your North Carolina Tax is reduced because of the credit in regard to the tax paid to California.

Re: State Taxable Income Incorrect

SteamTrain — Thu, 25 Jan 2024 13:49:09 GMT

After your Federal section is completely filled out, every scrap, make sure you fill out the CA Non-Resident tax return first.....