topic How to adjust NC income allocation from the W-2 amount in State tax filing

How to adjust NC income allocation from the W-2 amount

dcc67 — Sat, 15 Feb 2025 22:20:22 GMT

My W-2 allocated income to each of two different states (NC, my state of residency, and ID, where I worked about 40% of my work hours). The allocation was based on an estimate at the first of the year, and the actual allocation should be different.

If I select NC part-time residency for myself and not my wife, then I get a screen showing the W-2, not grayed out. But I cannot adjust the amount of income attributable to each of the two states. When I go into the NC forms I cannot adjust the W-2 income allocation there either. Surely there must be a way to adjust those values – how do I do that?

Using TurboTax Premier on MacOS.

Re: How to adjust NC income allocation from the W-2 amount

KeshaH — Sun, 16 Feb 2025 19:03:57 GMT

You mentioned that NC is your state of residence. If you were a resident of NC for the full year, all of your income is taxable to NC - regardless of where it was earned. You would only allocate income between the two states if you were a part year resident of both.

However, NC will typically allow you a credit for the tax that you paid on the income that is taxable to both states.

Re: How to adjust NC income allocation from the W-2 amount

dcc67 — Mon, 17 Feb 2025 13:52:47 GMT

Thank you, KeshaH. That is helpful and explains the numbers coming from TurboTax when I select full-time NC resident.

However, if I select part-time resident of NC for myself (my wife stayed in NC all the time; for me, I can see my residency being argued either way), I still get a dialog box that shows the W2 allocations of income to the two states, and that box does not allow me to edit those values to the correct values (even though they are not in gray highlight). This has been a consistent TurboTax behavior for 3 years now, so I must be missing something.

Re: How to adjust NC income allocation from the W-2 amount

KeshaH — Mon, 17 Feb 2025 14:32:54 GMT

We can take a look at your return so we can see exactly what you see and help come to a resolution. The return will be scrubbed and will not include any of your personal details.

Once you're logged in to your account,

- on the left hand panel, click on Tax Tools and then choose Tools

- on the pop up window, select Share my file with Agent

- you'll see a message saying you'll give us a copy of your tax return. Your personal information will be changed so we can't see any private information.

- click okay and you'll get another message with a token

Reply to this message with your token and we'll take a look to see what we can find. Let us know what other states, if any, are included in your return.

Re: How to adjust NC income allocation from the W-2 amount

dcc67 — Tue, 18 Feb 2025 14:01:43 GMT

Thank you, KeshaH. The two states are NC and ID (no other states), and it's best if the total adjusted income can allocate 60% to NC and 40% to ID.

I'll send two versions and you can choose which to look at.

Version declaring myself a part-time resident of NC: [removed]-61881828

Version declaring myself a full-time resident of NC (gives the biggest refund, by the way): [removed]-82178833

Re: How to adjust NC income allocation from the W-2 amount

KeshaH — Tue, 18 Feb 2025 14:27:41 GMT

Thank you for sending these, but they came across without the full numbers. Can you please send again, but this time breaking up the numbers so the system doesn't glad it as a phone number? Thank you!

Re: How to adjust NC income allocation from the W-2 amount

KeshaH — Tue, 18 Feb 2025 15:02:11 GMT

We actually were able to get it pulled - so please disregard my last message.

I reviewed your return under both scenarios:

1. both you and your wife as full time residents of NC with a credit on your NC return for tax paid to ID, and

2. you as a part time resident of NC and your wife as a full time resident, with only paying NC tax on your NC income and no credit for tax paid to ID

I wasn't able to recreate the issue you had with not being able to allocate your income under the second scenario. However, in both scenarios, the net NC tax liability didn't change. Your refund was the same regardless of which way you file. The simplest method would be to file under scenario 1 - as full time residents for both and your wife.

Re: How to adjust NC income allocation from the W-2 amount

dcc67 — Tue, 18 Feb 2025 23:41:10 GMT

Oh, yes. I thought that was a strange thing.

#17 05662 12-61881828 as PTNC resident

#17 05662 12-82178833 as NC resident

Re: How to adjust NC income allocation from the W-2 amount

dcc67 — Wed, 19 Feb 2025 00:04:56 GMT

Thank you, KeshaH. I missed your response with your results until just now.

I promise you, with the PTNC resident option, TurboTax does not allow me to modify those income fields from the values it takes from the W-2. And I do not get the same refund with either option.

I am using TurboTax Premium on MacOS. Is there something haywire in the Mac version?

I appreciate you looking at it as closely as you did.

Re: How to adjust NC income allocation from the W-2 amount

KeshaH — Mon, 24 Feb 2025 12:18:39 GMT

Since you're still having issues properly allocating your income and we can't recreate your issue, I recommend contacting TurboTax phone support to connect with a live agent. They will be able to connect to your actual program and see what's causing the issue.