I lived full time as a resident of TX. In 2021with two sources of income. One source is work from home office for the federal government based in AL. A second source is my pension for work not in AL. TT wants me to claim AL tax on the person.

[cwglover]

I lived full time as a resident of Texas in 2021. I had two sources of income. One source comes from work I performed from my home office for the federal government based in AL. A second source is my pension from 30 years of work at national laboratory in TN that had nothing to with AL. I'm paying federal tax on both sources. TT wants me to claim AL taxes on both sources. Do have to pay AL tax on my pension? If not, what should I do in TT? Can I claim a home office deduction as well?

[DoninGA · Accepted solution]

If you did not live or work in Alabama in 2021 and there were no Alabama state income taxes withheld from your wages you do not file an Alabama state tax return.

In the My Info or Personal Info section of the program you should not have indicated that you earned money in Alabama.  Go back to My Info or Personal Info and Edit the section for Other State income.

However, if there were Alabama state income taxes withheld from your wages then you will have to file a nonresident Alabama state tax return to get a refund for the state taxes withheld.

[JohnB5677 · Accepted solution]

You should not pay Alabama tax on either income. DoninGA was exactly correct.  You should first check any entries you have in the My Info section.

1. On the black sidebar go to My Info
2. Select [Edit] next to your name
3. Tell us the state(s) you lived in = TX
4. I lived in another state in 2021. = No

Check to see if there is any indication of AL on either your W-2 or your 1099-R.

As DoninGA said, you will only have to file an AL tax return if you had taxes withheld for AL.

[cwglover]

My company did pay AL taxes on the first source of income, therefore I will file a NR AL tax return. However, no AL taxes were paid on the pension income because that income had nothing to do with AL. TT wants to transfer pension income amount to my AL state return. I don't want TT to this. What should I do to prevent this?

[DianeW777 · Accepted solution]

You are correct.  The pension is not taxable to Alabama (AL) since you are not a resident there. When you are in the AL state section of your return you have the opportunity to adjust your pension amount for AL purposes. 

Simply click the Edit button when that screen comes up and change the taxable amount to zero.  This should allow you to complete your AL return correctly.  

1. Answer 'No' on the screen 'Alabama Special Handling of This Distribution'
2. On the next screen enter zero for the taxable amount for AL
3. See the image below.