Can Federal Amount for a Combined Rental Income from 2 States be less than the Allocation for 1 State?

[Louis801]

Hello and thank you for taking the time to answer my question.

I'm finalizing my Utah State return as Non-resident.  I have a rental in the Utah and reside in NJ and also have rental here.  I had profits in UT and loses in NJ due to repairs and upgrades.  Let's say my Federal combined rental income/losses is +10k  (20k after expenses in UT minus 10k after expenses in NJ ).  The UT return is asking me the Utah portion of this income.  Do I put my actual UT rental income (20k) or the UT amount has to be less the Federal Amount combined (income minus expenses of both States)?

thanks!

[AmyC]

Utah gets to tax the full income earned in Utah. NJ as your resident state will also tax that income so you will have a credit for the income taxed in Utah on your NJ return.

You get credit for the lower state tax on the lowest taxable amount.

• Each state calculates taxable income differently. 
• Each state has its own tax rate/ system.
• You get the lowest of both categories as a tax credit.

[Louis801]

@AmyC   Thanks for the taking the time to answer my question.  Greatly appreciate it. 

Just want to make sure because the enter the Utah "portion" of the following income is really throwing me off.  Me trying to understand this, it would imply that "portion" in a fraction of the federal income of $13.5k  or less than $13.5k  However my Utah rental income was $21398    Is it correct to continue as shown in the image

[Louis801]

Can anyone confirm if by putting a higher number in Utah Amount compared to Federal Amount would trigger some issues?

thanks

@AmyC 

[MarilynG1]

No, this should not be a problem.  Utah will get a copy of your Federal Schedule E and be able to see that the Federal Rental Income amount is the net of the two separate rentals.

@Louis801