married couple live in CO and one works for company in CA and spouse works in CO

[prhoten_2022]

We are married couple that lived full time in Colorado for 2021, I worked for company in California for 2021 and my spouse worked for company in Colorado for 2021.  How do we file fed and state taxes thru Turbo tax?

[LenaH]

Some additional clarification is needed to answer the question correctly. Did you telecommute from Colorado or were you in California when you earned the wages? In addition, was California state income tax withheld from your wages? 

[prhoten_2022]

telecommuted from Colorado. California taxes was withheld.

[LenaH]

You will have to file a resident Colorado return and a nonresident California return.

You have zero sourced wages to California because the income is sourced to your home state. Sourced income means that you physically earned the wages in that state. Per the State of California, you are only responsible for state income tax if you performed services in California for wages. Therefore, you are only filing a California nonresident return to get a refund of taxes paid.

Your home state of Colorado will tax you on this income. Therefore, you will likely have tax due to Colorado and depending on your underpayment, might be subject to a penalty. It would be best to have your employer withhold Colorado tax if you continue to plan on telecommuting.

Please complete the following steps in TurboTax:

1. Open your return.
2. Enter all of your information and tax forms on the federal screens.
3. Click on State on the left-hand side.
4. Add California. 
5. Confirm it is a nonresident return.
6. On all of the allocation screens, enter $0 for California sourced income.
7. Once you are finished with your California return, start your Colorado return.
8. Follow the on-screen instructions. 

@prhoten_2022

[prhoten_2022]

I'm using Turbo tax application on a Mac and it fills in all the numbers from the fed tax info for the state forms. How do I change state values?

[AmyC]

You need to do the CA state first. Try again:

1. Go into the program,
2. go to state section
3. CA edit/ revisit
4. Go through the tax filing and residency questions
5. Go through Payments, dependents, health insurance
6. Go through IRAs, mortgage interest, grants, etc
7. Keep going until you get to Let's See How CA taxes Income
8. Continue on until Did you Earn All of your Income in CA? Select No
9. Drop down appears, enter zero
10. Continue following instructions from @LenaH above.