I only earned wages in CT, but owe taxes in MA, which is my resident state. Got a popup about Earning Money in other states and that it will not double, why is it?

[mlholmes7310]

I work in CT and live in MA, but earn no wages in MA. Why do I owe taxes there?  Its not a large amount but seems wrong and am not sure why its doing this.

[JohnB5677]

Your resident state s the state that your home address is in.  It sounds like that would be Massachusetts.

• If you earned money on Connecticut and live in Massachusetts, you will have to file both tax returns.
• Prepare the Connecticut return first.
• You will owe the full tax there.
• Then prepare Massachusetts.
  • You will have a question " Taxes Paid to other States."
  • Post the amount paid to Connecticut here
  • You will get credit for the taxes paid (Up to the amount you would have paid to Massachusetts.)

Please contact us again with any additional questions or to provide some additional details.

[mlholmes7310]

Hi John - Thank you for the quick response.  I did enter that information but it says that my allowable credit for income taxes paid in CT is $4,248 even though I paid $5,089.35.   My MA 5% income tax is $4265 and the Income tax paid in other states is $4248, which is causing me to owe MA.  I dont understand why the amount I paid in CT is being reduced.

[mlholmes7310]

Hi John

Those are the exact steps I followed, however I still owe money to MA and dont understand.  Do you agree that I should not owe any money to MA if I didnt earn any wages there?

[DawnC]

No, not necessarily.   Your resident state taxes all of your income, including income sourced to another state.   Each state has its own rules and tax laws.  MA does not give a dollar for dollar credit for taxes paid to another state.   

Filing Tax Returns in Multiple States - If your nonresident state has higher taxes than your resident state, you might end up paying more in total taxes because your resident state won't allow you a full credit.  This is common for MA residents that work in CT.   The linked article has more information on how states calculate your tax bill, but rest assured, TurboTax is following the tax code for each state.  

MA credit for taxes paid to another state