Solved: I retired and moved from NC in May 2016. Why do I still owe more NC tax?
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eakina
New Member

I retired and moved from NC in May 2016. Why do I still owe more NC tax?

I retired from my job in NC in May of 2016.  I no longer work.  I don't understand why I still owe NC tax. Please help me understand (pretend I'm a 6 year old who DOES NOT have a tax or accounting degree)  Thank you.
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SteamTrain
Level 15

I retired and moved from NC in May 2016. Why do I still owe more NC tax?

It requires too much detail and a term paper to really describe it all....but just because you moved, doesn't mean that you won't owe NC at least some taxes.

1)  First make sure you've entered your new state as your state of residence on 31 Dec, AND the fact that you moved from NC, and the date of the move, on the Personal Info page. that will trigger the part-year tax return for NC (and your new state too if it has an income tax).

2) Ignore the state taxes section until your Federal Tax file is completed...everything except for filing it...that means every scrap of income, and every Deduction&Credit, and error checked until it's clean..everything.  At this point, all of your income is assumed to be NC income too......but that will be handled in step #3.

3) then start in on the NC part-year tax return......work thru it slowly.  You will be asked to allocate your income that is subject to NC taxes,.  Your NC W-2 you will "tag" as being PY-NC Source Income.  (Picture 1).  If you happened to work in the new state, you can tag that as NOT NC Source income on the same page.

4) then you step thru the next pages (picture 2) where you need to indicate what SUB-PORTION of the Federal income was received while you were living in NC. i.e. you did get interest and dividends, and capital gains (maybe) up until you moved in May...and those $$ are NC-taxable.  But if you started getting a pension in that new state, then those $ are a zero in that NC Resident Income column  (the 3rd column, NC Income While Nonresident is usually all zero's).  Step thru all those pages, and that should re-set your NC taxes to only tax your NC income.

5) then look at your NC form D-400.  ALL your income is entered down thru line 12, but line 13 should be a decimal amount that chops down your taxable income on everything, to just a smaller amount on line 14 which is your NC-Only taxable income.

Repeat all the above until you understand it, and are sure it's correct,  before filing NC.  spend 3 or 4 weeks at it..

*Answers are correct to the best of my knowledge when posted, but should not be considered to be legal or official tax advice.*

View solution in original post

1 Reply
SteamTrain
Level 15

I retired and moved from NC in May 2016. Why do I still owe more NC tax?

It requires too much detail and a term paper to really describe it all....but just because you moved, doesn't mean that you won't owe NC at least some taxes.

1)  First make sure you've entered your new state as your state of residence on 31 Dec, AND the fact that you moved from NC, and the date of the move, on the Personal Info page. that will trigger the part-year tax return for NC (and your new state too if it has an income tax).

2) Ignore the state taxes section until your Federal Tax file is completed...everything except for filing it...that means every scrap of income, and every Deduction&Credit, and error checked until it's clean..everything.  At this point, all of your income is assumed to be NC income too......but that will be handled in step #3.

3) then start in on the NC part-year tax return......work thru it slowly.  You will be asked to allocate your income that is subject to NC taxes,.  Your NC W-2 you will "tag" as being PY-NC Source Income.  (Picture 1).  If you happened to work in the new state, you can tag that as NOT NC Source income on the same page.

4) then you step thru the next pages (picture 2) where you need to indicate what SUB-PORTION of the Federal income was received while you were living in NC. i.e. you did get interest and dividends, and capital gains (maybe) up until you moved in May...and those $$ are NC-taxable.  But if you started getting a pension in that new state, then those $ are a zero in that NC Resident Income column  (the 3rd column, NC Income While Nonresident is usually all zero's).  Step thru all those pages, and that should re-set your NC taxes to only tax your NC income.

5) then look at your NC form D-400.  ALL your income is entered down thru line 12, but line 13 should be a decimal amount that chops down your taxable income on everything, to just a smaller amount on line 14 which is your NC-Only taxable income.

Repeat all the above until you understand it, and are sure it's correct,  before filing NC.  spend 3 or 4 weeks at it..

*Answers are correct to the best of my knowledge when posted, but should not be considered to be legal or official tax advice.*

View solution in original post

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