To file your out-of-state earned income from California while being a legal resident of Indiana in TurboTax, follow these steps:
- Be sure you are logged in to TurboTax for link in Step 2 work:
- Go to the Personal profile screen, scroll down to Other State Income, and select Edit.
- If link does not work - go to About Me and then select Personal Info
- Report Other State Income: In the "Personal Info" section, scroll down to "Other State Income" and select "Edit." Answer "Yes" to the question about earning money in other states and select California from the drop-down menu
- Select Continue to return to the Personal Profile screen.
- After you finish your federal return, you'll automatically move to the State taxes section, where you'll see your nonresident state(s) listed in addition to your resident state.
- Complete Federal Return: Finish your federal tax return first. TurboTax will guide you through this process.
- State Taxes Section: After completing your federal return, you'll move to the "State Taxes" section. TurboTax will list both Indiana and California.
- File Nonresident Return: Start with the nonresident California return. TurboTax will help you report only the income earned in California
- Claim Credit: When you move to the Indiana return, TurboTax will prompt you to claim a credit for taxes paid to California to avoid double taxation.
Key Points:
- As a full-year resident of Indiana, you must report all income, including income earned from other states, on your Indiana state tax return.
- You must report nonresident income from California because California taxes income earned within the state, regardless of your residency
For more detailed guidance, you can refer to TurboTax's official support page here
