filing taxes in two different states when you live in only one

[wonachen]

why is turbo tax requiring my grandson to file taxes in both arkansas and wisconsin when he has lived the entire year in Arkansas.  His earning is for a trucking company out of wisconsin and they have not held out any state tax for wisconsin.  I helped him get them filed thru turbo tax but I have thought about this all day and the more I think about it the more I think it is not right.  Plus I just found an online article that says that income should not be double taxed.  The more I have thought on this today all I can think is why would this be right.  What if he had lived in more states during that time?

[KeshaH]

If your grandson didn't live or work in Wisconsin, he generally shouldn't owe any tax to the state. There are a couple of places in TurboTax that would generate a state tax return. If you haven't filed the return yet, check these areas:

1. On the My Info tab, the last section asks if you earned income in any other state. Make sure the answer here is No, I didn't make money in any other states.

2. You said the employer didn't take any Wisconsin tax. On the W-2 input screen, make sure Wisconsin wasn't added as a state under the State tax section. 

3. In the State Tax return section, delete the Wisconsin return. 

If you've already filed the returns, you'll need to amend the Wisconsin return to reverse the income and eliminate any tax owed. Follow the instructions in this help article, How to amend my state return in TurboTax, to create the amended return.

[trevalston]

He did not live in Wisconsin but his W-2 is from Wisconsin.  He is a truck driver and his trucking company is based in Wisconsin.  I have read that it is illegal to pay double taxes.  We have this currently set up to come from his bank account but if he is not supposed to pay in two different states then I would like to get this corrected.  And it does not seem right...what if he had worked in multiple states besides the one where he lives and the one where he works?  This just does not seem right.

I have tried to do an amend and it says "This section will be ready February 22

• This section is unavailable while we work on updates for recent tax law changes.

• It's OK to skip this for now and work on other parts of your return.

• When it's ready, we'll update you using the email you signed in to TurboTax."

[KeshaH]

It's not illegal to pay tax to more than one state on the same income, but states typically have credits to reduce or eliminate double taxation. If he had worked in actually worked in a different state other than Arkansas, he would generally owe tax to that state as well as Arkansas with a few exceptions. If he lived in multiple states during the year he would have to allocate his income between the states.

The W-2 being from WI doesn't automatically subject him to tax in Wisconsin. On the screen where it asks if he earned income in any other state, the answer here should have been No. This is asking if he earned income while actually working within the state.

Once the amended forms are ready, you can follow the steps in the previous response to set up the amended return. After you set up the amendment, you will go back through the Wisconsin return to make the adjustments. When you get to the screen asking for allocating income, make sure you enter 0 in the Wisconsin column. See the screenshot below for an example.