topic Lived in Multiple States - One State is Taxing Full Federal Income in State tax filing

Lived in Multiple States - One State is Taxing Full Federal Income

mrbell394 — Sun, 25 Feb 2024 23:26:39 GMT

I was a part-year resident of OH in 2023, and am a full-time resident of NC as of March 2023. When I completed the OH state taxes, they are considering my full Federal Income amount as taxable in OH. However, NC is correct in splitting out only the NC-taxable income. The NC section asked me to split out my income as either NOT or PY resident, but OH did not do the same. How do I correct OH state tax section to only consider the income I made while a resident of OH?

I have confirmed that I entered my part-year residency information correctly in the personal information section.

Re: Lived in Multiple States - One State is Taxing Full Federal Income

JamesG1 — Mon, 26 Feb 2024 00:49:07 GMT

I am assuming that you have correctly prepared part-year Ohio and part-year North Carolina state income tax returns.

The Ohio / North Carolina income that is an issue are reported on the same W-2 from the same employer. Is that correct?

If that is correct, does the one W-2 from the one employer report two lines 15 through 17?

One line reports Ohio income and Ohio withholding tax.

The second line reports North Carolina income and North Carolina withholding tax. See this example.

In this example, the total of $20,000 + $21,000 equals $41,000 which is reported in box 1.

Does your one W-2 from one employer report income and withholding tax in this way or in some other way? I suspect it is reporting in some other way.

Re: Lived in Multiple States - One State is Taxing Full Federal Income

Hal_Al — Mon, 26 Feb 2024 01:58:56 GMT

Ohio is not taxing your whole year income. It only appears that Ohio is taxing your full year income.

Ohio does a convoluted tax calculation for non-residents/part year residents. It calculates tax on total income, then it calculates a non resident/part year resident credit, which it subtracts from the tax it calculated on the total income. The credit is calculated as your non-Ohio income divided by Total adjusted Income multiplied by the total tax. TurboTax (TT) does this by allocating your income as either Ohio or non-Ohio. W-2 income will be allocated by the state name abbreviation shown in box 15 of your W-2. TT will ask you, item by item, in the state section, how much of your other income is Ohio or non-Ohio income. Make sure that your non-Ohio wages show NC in box 15 of your W-2 screen, with the NC amount in box 16.

Re: Lived in Multiple States - One State is Taxing Full Federal Income

mrbell394 — Thu, 29 Feb 2024 13:31:41 GMT

Hi. The W2 is not reported that way. For the employer where I received part of the income in OH and part in NC, they sent me two W2s with identical employer ID numbers and total federal $. One W2 reported just OH, and the second W2 was a “copy b” and reported the NC taxes and the total (OH+NC).

Re: Lived in Multiple States - One State is Taxing Full Federal Income

mrbell394 — Thu, 29 Feb 2024 13:38:30 GMT

Hi. NC state section asked me to divide out my income by state (NC or non-NC) but OH did not do the same. Even after classifying my income in the NC section, the OH state section is still considering my full amount as taxable in OH.

Re: Lived in Multiple States - One State is Taxing Full Federal Income

Hal_Al — Thu, 29 Feb 2024 14:20:28 GMT

Q. NC state section asked me to divide out my income by state (NC or non-NC) but OH did not do the same?

A. OH does ask you to allocate all other income, except W-2 wages. W-2 wages are allocated at the W-2 screen. If your employer did not do the W-2 correctly (and it sounds like they didn't), you make adjustments at the W-2 screen.