topic Non resident income California and New Mexico in State tax filing

Non resident income California and New Mexico

miller4mi — Sun, 28 Mar 2021 20:51:30 GMT

My home state is Arizona, but I worked as a travel nurse in California and New Mexico. I have entered State tax returns for Arizona (resident) and California and New Mexico (non-resident). The Arizona state tax return is showing a balance due, and not applying a tax credit for the taxes I paid to California and New Mexico. Should I have done the non resident returns before entering my resident state return? I tried to delete the Arizona (resident) return and start over but there is no option to do this.

Re: Non resident income California and New Mexico

DavidD66 — Sun, 28 Mar 2021 21:07:30 GMT

Yes, you should prepare your non-resident states first, then add your Arizona resident return. To delete a state return in TurboTax Online, while logged in to your return:

Click on "State" on the hand side of your screen
You should be on the page that says "Let's get your state taxes done right"
In the upper center of the page, click on "Your State Returns"
You should see a list of states in your return, with the option to Delete. Cick on Delete and confirm that's what you want to do.

Re: Non resident income California and New Mexico

TomD8 — Sun, 28 Mar 2021 22:00:36 GMT

@miller4mi -- Here is the complication in your situation: California and Arizona are "reverse-credit" states. That means that your non-resident state of CA will give you a credit for the taxes paid to AZ on the portion of your income taxed by both. ("Reverse-credit" because normally it's the home state that gives the credit.)

Therefore you should complete your home state AZ return before you do your non-resident CA return.

CA currently has reverse credit with Arizona (AZ), Guam (GU), Oregon (OR), and Virginia (VA).

See "California Nonresidents" in this reference:

https://www.ftb.ca.gov/forms/2020/2020-540-s-instructions.html

Re: Non resident income California and New Mexico

miller4mi — Sun, 28 Mar 2021 22:20:03 GMT

Hi thanks for this info. I am using a downloaded version, not the online version.