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income from 2 states

How do I separate Income from 2 states so that State filings are accurate?

2 Replies
Level 15

income from 2 states

Depends on your depends on which states are involved (you didn't say which states), since some states have reciprocal tax agreements


In general

1)  IF you were a resident of one state during the year, and a) worked in another state, or b) had some other type of income from another state (usually rental income of some type)...then you enter all of it in the Federal section, then do the Non-resident state interview next...where you will indicate exactly which income was for that non-resident state alone...and after that work thru the Resident state interview....where ALL of the year's income is used to calculate a tax, but there is a spot to indicate a credit for taxes paid&kept by the nonresident state...which is why the nonresident state has to be done first.  (except the order is reversed between some of these exact states CA,OR,AZ,IN, VA, )



2) IF you "moved" to a different resident state sometime during the year....then you indicate the move and which states were involved in the a) MyInfo section...Online software...or b) Personal Info section...Desktop software.  Then after filling in the entire Federal will be prompted to indicate what sub-part of the Federal income belongs to each state during each state's part-year interview.  (except a couple states that do it a bit differently)


3)  If you worked/lived in one of the states or DC, where you lived in one and worked in another that had a reciprocal tax agreement between them, and it was a W-2 job in the non-resident state, then you usually only fill in your resident state tax return, because the income is only taxable by your home state .


So....depends on the states involved and your working/living situation


*Answers are correct to the best of my knowledge when posted, but should not be considered to be legal or official tax advice.*
Level 15

income from 2 states

The general rule is: your report all your income on your home state return, even the income earned out of state. You file a non-resident state return for the state you worked in (or had income from) and pay tax to that state. Your home state will give you a credit, or partial credit, for what you paid the non-resident state. But as others have said, it depends on the states and the details of the income.


Q. How do I separate Income from 2 states so that State filings are accurate?

 A. In the TurboTax interview, for the non resident state, you will be given screens to allocate portions of each  income item (wages, rent, interest, etc).  For some states, wages are allocated at the W-2 screen in the federal section (box 15 has the state abbreviation).

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