Bug? MN Non Resident Income Incorrect

[alexvosk55]

I am a California resident and has been a CA resident entire 2020. I worked for company A located in CA from Jan to May and then company B located in MN from June to December. I entered both W-2s.  I expect to be taxed by MN on earnings from company B, but TurboTax claims my MN taxable income is greater than income earned while working for company B. It looks like TurboTax counts income earned at company A as a MN taxable income. 

I entered allocation for MN for the amount earned at company B, but TurboTax still claims MN taxable income to be higher than that. 

What is the error and how can I fix it? Is this a TurboTax bug?

[ErnieS0]

No. Minnesota computes the base tax rate for part-year and nonresidents on total income. It then prorates your actual tax liability on the percentage of New York income.

For example, if you earned $10,000 total and $3,000 in MN, your tax rate would be based on $10,000. Say the MN tax on $10,000 is $2,000. Then your tax would be 30% ($3,000/$10,000) of $2,000 or $600.

The allocation is shown on Form M1 line 13.

Column B of Schedule M1NR will show the Minnesota portion of income being taxed. The only income in that column should be from Company B.

[alexvosk55]

Thank you for the thorough explanation!