It depends. Both states do tax your income, NC as a nonresident and SC as a resident. However, South Carolina will provide you with a credit for the taxes you pay to North Carolina. For this reason, you always want to prepare the nonresident (NC) return first, so that TurboTax can calculate this credit accurately.
How does this work? Let's say you earned 40,000, and you contributed $1,400 to NC tax and $0 to South Carolina. After doing the NC return, you receive a refund of $200 from North Carolina. This leaves you a South Carolina credit of up to $1200, If SC tax on the income is less than $1200, you will not owe tax. However, if it is more, you will owe the difference.
What should you look for? First, delete the South Carolina return and finish preparing the North Carolina return. Then, when you do prepare the SC return, make sure of the screen that shows "Credit for Taxes Paid to Another State". If your SC amount due is not zero, the amount of credit in the box should be the amount of NC tax withheld from your paycheck minus any NC state refund. If either you have $0 due to SC or the amount just mentioned for credit on NC tax paid, then you have the correct result.
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