topic How to enter NJK-1 for a K-1 with both Line 1 and 2 presented in State tax filing

How to enter NJK-1 for a K-1 with both Line 1 and 2 presented

spikhalskiy — Tue, 24 Mar 2020 21:09:29 GMT

I have a federal K-1 from a partnership with income in Line 1 and Line 2.

Because these lines can't be entered together in Turbotax I have to make two separate K-1s (One with all information except Line 2 - let's call it "K-1 Line 1", second with only Line 2 - let's call it "K-1 Line 2").

These two federal K-1 "K-1 Line 1" and"K-1 Line 2" are porting into my NJ state return as two separate K-1s entries.

Now I have an NJK-1 form to enter for state taxes for this partnership. It's one document and it's not split by Line 1,2,3 types of income.

My options:

Enter information from NJK-1 into both K-1s is obviously incorrect.
Enter information from NJK-1 into the"K-1 Line 1" looks also incorrect, because it contains data for the whole partnership income, not separately for Line 1 and Line 2. If I input the whole NJ K-1 amounts for "K-1 Line 1" and a"K-1 Line 2" will be "no NJK-1" - likely the totals are wrong. Turbotax will count full NJK-1 income (that already has Line 2 inside) for "K-1 Line 1" PLUS count "K-1 Line 2" income from the federal return.
I tried to enter NJK-1 in NJ state return for only the"K-1 Line 1". After that manually delete the"K-1 Line 2" and move its Line 2 data into the first K-1 in forms mode. Which can be done OK in forms mode in state return and the final result looks alright. BUT. When Turbotax makes "Error check" - it reimports federal K-1s and messes the result.

Summary: Turbotax forces you to split K-1s by income types and Line 1,2,3. But the NJ state NJK-1 form has only summarized data for all income types. How can I handle it correctly?

Re: How to enter NJK-1 for a K-1 with both Line 1 and 2 presented

Irene2805 — Wed, 25 Mar 2020 20:03:31 GMT

In the NJ return Partnership Income section, continue the entries in NJ as if there were two K-1s.

Let's say your federal and NJ K-1s have $50,000 in line 1 and $25,000 in line 2. If you enter them separately in the NJ return, TurboTax will combine the income from both and enter the total ($75,000) on line 21 of the NJ 1040, p. 2.

Re: How to enter NJK-1 for a K-1 with both Line 1 and 2 presented

spikhalskiy — Thu, 26 Mar 2020 05:35:12 GMT

Thank you for your response!

> In the NJ return Partnership Income section, continue the entries in NJ as if there were two K-1s.

It's impossible, NJK-1 is not split by sources of income. So I can't answer "Yes, I received NJK-1" to both of these K-1 forms and input the right data because NJK-1 contains only a summation of all income sources (this is confirmed with partnerships), there is no way to split NJK-1 between Lines of K-1.

> Let's say your federal and NJ K-1s have $50,000 in line 1 and $25,000 in line 2. If you enter them separately in the NJ return, TurboTax will combine the income from both and enter the total ($75,000) on line 21 of the NJ 1040, p. 2.

Turbotax doesn't have a flow to apply NJK-1 to this total value on NJ 1040, p. 2.

Turbotax allows you to input NJK-1 for a specific K-1 only. Input full amounts from NJK-1 to one of K-1 or both of them both lead to incorrect results and totals either way.

I contacted Turbotax support about this question yesterday. They were not able to help me and it was reported as a bug in K-1 flow design. Looks like there is currently no way to execute the described scenario correctly in Turbotax.