Michigan Schedule NR

[birdbertly]

I am a full-year Michigan resident and my husband is a part-year resident (1 month of 2021).  Turbo Tax is giving us far too little Michigan income and way too large of a pension subtraction because on Schedule NR it will not allow me to count my income as Michigan income.  It says the form only applies to part year residents, but then my taxable pension income does not get added in anywhere.  I was a tax practitioner for many years and I know that my income is taxable (subject to the allowed pension subtraction).  If I override the field anyway, Turbo Tax gives me an error.  

I have double checked everything I can think of that could have caused Turbo Tax not to count my income.  

I am T (taxpaper) and my husband is secondary.  The pension is coded as belonging to me.

It is doing  a similar thing with our taxable Social Security income.  

I am working with the forms version of the software, hoping to be able to get the forms to fill in properly by manually overriding Turbo Tax's computations, but it's too smart to let me do that too!  

[JillS56]

My suggestion would be to switch to step-by-step.   There are specific questions that are asked as to what portion of the federal entries are taxed to Michigan.  It goes through each of your federal entries.   By entering in the forms version you may be missing an entry that is required to tax the income correctly.    

Here is an article on Allocating State Income between States.

[birdbertly]

Thanks for your response.  I appreciate it.  Unfortunately, the very reason I am using the forms version of Turbo is because the interview method could not handle my situation.  As a former tax practitioner of many years, it appears I will have to do the Michigan return manually to properly handle our multi-state part-year residence situation.  Disappointing, but not surprising.  

[birdbertly]

I found a way to make it work.  I had to override the field on the Turbo Tax Michigan Schedule NR, so that pension earned by the resident spouse was entered in Column B even though the instructions say not to include it.  Otherwise, the total Michigan income was too low, and the subtractions were greater than the income.  I still find it weird that Michigan does not require us to prorate the $40000 tier 2 standard pension deduction when one spouse is not a full-year resident.