Hello all.
For the 2021 return, I earned part of my income in Missouri but I live in a different state that does not have tax reciprocity. When filling out the MO_NRI form for Non-Residents (TurboTax), it looks like the state is charging tax on income earned while NOT working in Missouri or from Missouri sources, but is also applying tax on my spouses total income even though they never worked in Missouri at all. This seems wrong to me, as their income un-related to MO should not be taxed at all.
It also appears MO is taxing a 401K distribution that again, was earned from my State of Residence and not while employed within MO at the time. Am I doing something wrong here within TurboTax? I've triple checked all the information and it's being entered correctly. It looks like MO is applying the tax rate based on total AGI and is not looking at only the MO sources field.
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Please clarify:
Did you prepare your non-resident state return first before your resident state return?
To ensure accurate calculations, always complete the nonresident state return first if filing in multiple states because your resident state might give you a credit for any taxes paid in that situation.
Non-residents in MO first complete part of Form MO-1040 calculating tax on income from all sources, then complete Form MO-1040-NRI to report Missouri-source AGI and calculate the Missouri income percentage. The Missouri income percentage is used to prorate tax and claim credits.
I completed my resident state first. Then I saw the direction to complete non-resident state first. My bad. I deleted all three states (2 non-resident and one resident) and started all over again. My wife works in Missouri. We do not live there. Turbo Tax continues to show my income earned in Kansas as Missouri income and shows a tax owed.
How do I remove this income from Missouri?
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