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Do I file 2 Part Year State returns? How do I allocate income? NC resident for 7 months then moved to SC. SAME JOB in SC all year. Should I file part Year NONRES for SC?

Need help determining which state is part Year resident and which state is part Year nonresident - SC gives me the choice to file as nonresident. I Lived in SC at end of 2017. Will I get a credit from SC for my NC return if I am part Year resident? I'm Having trouble allocating money correctly on TT. Can  someone explain in a little detail how to do it? TT asks for allocations on each state return for my W2 income, bank interest, alimony received, and 1099 G for State refund in 2016: not sure how to allocate. Do I change the autopopulated fields on each return to match what was actually earned WHILE LIVING in each State? The 1099G income is wanting allocations also. Will I receive a credit for taxes paid to SC?  Thank you for detailed response I appreciate any help 🙂

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1 Reply
IreneS
Intuit Alumni

Do I file 2 Part Year State returns? How do I allocate income? NC resident for 7 months then moved to SC. SAME JOB in SC all year. Should I file part Year NONRES for SC?

You should file a part-year return for both NC and SC.  Prepare your nonresident return first (NC) since you did not live in NC on December 31, 2017.

As you indicated, as a part-year resident of SC, you may consider yourself a full-year resident or a nonresident.

Option 1.  Full-year Resident.  If you elect to file as a full-year resident, file SC1040. Report all your income as though you were a resident for the entire year. You will be allowed a credit for taxes paid on income taxed by South Carolina and another state. You must complete SC1040TC and attach a copy of the other state's income tax return.

This is the easiest approach since you don't have to prorate your income between the 2 states.


Option 2.  Nonresident.  If you elect to file as a nonresident, file SC1040 with Schedule NR. You will be taxed only on income earned while a resident in South Carolina and will prorate your deductions and exemptions. 

Some fields will be pre-populated with figures from your W-2.  It's OK to use these figures. You will have to prorate other items, such as interest, capital gains, etc. yourself.    You can allocate by the time you lived in each state, for example:  7/12 (7 months) for North Carolina and 5/12 (5 months) for South Caroline

To find the most beneficial filing status, you can first prepare your SC return as a PY resident filing as a resident and then go back and complete the return filing as a nonresident.  You make the selection on the South Carolina Residency Information screen in the SC interview.  [See Screenshot #1.]


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