Interest and dividend income reporting to SC while working in NC

[spark-co2]

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spark-co2

spark-co2

Returning Member

Interest and dividend income reporting to SC while working in NC

I earn my W2 income in NC while I reside in SC, and have some interest and dividend income as well.

While filing out SC taxes, SC deducts dependent exemption from my total federal gross salary. This amount is lower than my W2 income. Now, SC form 1040 TC asks , "Portion of line 1 taxed by another state".. TurboTax is putting my NC W2 salary there, and since that is higher than my SC geoss salary, my SC taxes are showing as $0.

However, since I do have some interest and dividend income,

where and how do I show that to SC, so that it gets taxed appropriately for the resident state.

[SteamTrain]

You don't need to. The SC tax forms start out with the Federal income...which already includes interest and dividends. Of course, this assumes you've already entered every source of income in the Federal section. ....don't work on any state forms until every scrap of Federal has been entered....all income, credits, deductions Then NC non-resident must be filled out before working on SC resident forms.... All done in that order.

[spark-co2]

Thanks for the detailed explanation.

For my simplistic mind, I have included some dummy numbers below:

• Federal gross salary including W2 and interest/dividend: 100,000
• W2 salary while working in NC as non resident: 95,000
• Interest and dividend income: 5,000

Now, when SC 1040TC gets calculated for credit paid on taxes paid to other state, below information shows up:

• Line 1 is SC gross income after dependent deduction: 89,000
• Portion of line 1 taxed by another state: 95,000 (NC W2 income)

Because W2 salary is higher than the SC gross income, SC taxes are showing up as $0.

However, I am failing to understand that how and where SC state tax for resident on interest and dividend of $5000 is being paid.

[SteamTrain]

Hmmm, not sure.  yeah, there would seem to be some small amount of leftover tax involved for those.

But I don't have the SC forms myself, so I can't see what's happening in detail.

Therre is someone ( @DaveT315  ) who at least used to have SC tax forms....but not sure he is around this year....hasn't posted for a couple years.

____________________

the only thing I would recommend is that you do not try to enter anything on the forms themselves.

When you do go thru the SC resident interview, and go thru the credit for taxes paid to NC, do not change the credit that TTX calculates.  The credit that SC allows is only "up-to" the amount that SC would have charged....and even then, only the amount that NC kept (if they end up refunding any to you)