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benmcconaughy
New Member

Capital gains transferred to non-resident state

Hello: I live in my primary state. I have a small ($4) bit of k-1 pass through income from New Mexico. When I try to complete the new mexico non-resident return, it is populating the return with capital gains that have nothing to do with New Mexico. In the allocation part of the non-resident return I have indicated that $0 of my capital gains are allocable to new mexico. I have also gone back and coded the capital gain entries to my primary residence state. I am still ending up with the gains allocated to New mexico. Any other ideas?

 

5 Replies
DavidS127
Expert Alumni

Capital gains transferred to non-resident state

Note that the New Mexico Nonresident return calculates taxable income from all sources as if you were a full-year resident.  Then, based on what you entered for New Mexico-source income is used to "prorate" the tax on that total taxable income.

 

In other words, the New Mexico nonresident returns calculates what your tax would be if you lived in New Mexico, and then applies a percentage (which in your case should be very small) to calculate the nonresident state tax you pay.  I would expect your tax due for New Mexico to be very small or "zero".

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ChrisOBrien
Returning Member

Capital gains transferred to non-resident state

I am having this same problem, only it's saying I owe $230 on about $2500 earned in NM. I'm a CA resident full time and I'm getting a return there... but Turbo Tax thinks I owe NM? Something's wrong.

DianeW777
Employee Tax Expert

Capital gains transferred to non-resident state

As stated by Tax Expert @DavidS127, New Mexico (NM) calculates taxable income from all sources as if you were a full-year resident.  Then, based on what you entered for New Mexico-source income is used to "prorate" the tax on that total taxable income. Review your entries in the NM state return to be sure you have allocated the right amounts.

 

What is the New Mexico state income tax rate for 2021?

Under legislation recently enacted L. 2019, HB6 (c. 270) and effective January 1, 2021, the personal income tax rates are revised as shown below, with the highest tax rate increasing from the current 4.9% to 5.9%. Currently, employers can withhold New Mexico income tax at the flat rate of 4.9% on supplemental wages

 

You can print your return before filing so that you can review.

@ChrisOBrien

ChrisOBrien
Returning Member

Capital gains transferred to non-resident state

Okay well then there’s a glitch in your program that’s calculating it incorrectly because I’m being taxed $380 on $2550 of NM income according to TurboTax

RobertB4444
Employee Tax Expert

Capital gains transferred to non-resident state

@ChrisOBrien  That's a 15% tax rate and that is steep.  But if you live in a state that doesn't have income tax then New Mexico takes a pretty good bite.  Here's a link to the New Mexico revenue website.

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