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stechamar
New Member

How do determine income allocations for different states?

 
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2 Replies

How do determine income allocations for different states?

I would look for state income tax instructions (search for a website and instructions for individual non-resident income) for the states you have questions about, as states do vary in what they tax - if you have W-2's they should indicate the income in each state as reported by your employer.

 

If you have a question about a specific state, post that question so a person who knows that state's laws can help you.

AmyC
Expert Alumni

How do determine income allocations for different states?

The main thing is if you are a full year resident of one state, and just worked in various states, then you will do non-resident returns for the states that require you to file. Then, LAST - do a credit on your state return for all the taxes to the other states.

 

If you are a part year resident, you will normally allocate income earned from that state or while in that state.

 

You can contact the Department of Revenue  for each state. We are glad to help with filing requirements if you want to reply.

 

If you were full year resident: 

Your resident state taxes all income but gives a credit for income taxed by another state.  Please carefully follow these directions.

You will need to prepare the states in a special order. You may need to delete both states and begin again.

  1. First, prepare your non-resident  return. This creates your tax liability for the non-resident state. How do I file a nonresident state return?
  2. THEN prepare your resident state return and it will generate a credit for your income already being taxed in the non-resident state.
  3. The credit will be the lower of the state tax liabilities on the same income. You may owe your resident state.

It isn't possible for the program to create a credit before it knows the liability. Your returns may be wrong if you do not prepare the states in this order.

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