Iowa Dep of Rev is requesting IA126. TurboTax filed my Iowa-Source Income as $0, but I earned wages in Nebraska while a part-year resident in Iowa. Is this incorrect?

[TomD8 · Accepted solution]

Iowa can tax ALL the income you earned while you were a part-year Iowa resident, regardless of where you earned it.  An Iowa part-year resident would file Iowa Form IA-126.

Nebraska can tax you as a non-resident on any income you earned by physically working in Nebraska.  

So, if you earned income from working in Nebraska during the time you were an Iowa resident, you'd have to file a non-resident Nebraska return AND an Iowa part-year resident return - on IA Form IA-126.  You'd be able to take a credit on your IA return for the tax you paid to NE, so you wouldn't be double-taxed.

So, if you never filed an IA-126, Iowa is correct in requesting it from you now.