Montana non-resident taxable income

[Scott_B]

I’ve earned 1099 income in three states: Texas (where I reside), Michigan, and Montana.

I’ve entered my 1099 income in my federal taxes. I’ve also entered the portions I earned in Michigan and Montana. In both cases, I filed as a non-resident. 

Let’s say I made 150k overall, with 100k in Michigan and 50k in Montana, and <1k in Texas.

For Michigan, when I look at the “Tax Summary" view, it shows I have a federal AGI of ~150k, then a Michigan subtraction of ~50k, then lists a Michigan taxable income of around 100k (I’m rounding these numbers and excluding the exemptions that have also been figured in correctly). My Michigan tax is what I’d expect from previous years.

For Montana, I enter the Montana portion of my income (the 50k) and click through all of the screens (none of which pertain to me). When I get to the Montana tax return summary, it says my Montana adjusted income is around 150k. This is the same amount that appears in the “Tax Summary” view. The 50k that I entered is not reflected in the “Reductions to income” as it was with Michigan (I would expect that reduction to be around 100k—it’s just BLANK).

In summary, I’m a Texas resident earning income in three states. Texas does not have state income tax. In the Michigan state return, I am only taxed on the portion of income I earned in that state. In the Montana return, I am taxed on all my income, including what I earned in Michigan and Texas (and I’ve double checked I’m not inadvertently filing a resident return). Is this a bug in the TurboTax Montana state download? I didn’t have this problem last year.

[KathrynG3 · Accepted solution]

No, this is not a bug in the Montana state download. However, you are exactly right, the Montana portion of your return needs to be revisited.

I recommend going through the interview again, to get back to the income splitting screens.

Be certain to only include the Montana portion here. At the end, you will see the Montana Tax Return Summary.

You may find these instructions below quite interesting. They require you to file as if you were a resident and then take a credit to end up with only taxing the Montana portion. If you are reviewing forms, it is going to look like it is pulling in too much income at first.

Click the link for the MT Individual Income Tax Instructions. See page 8 for Nonresident Tax and page 35 for Nonresident/Part-Year Resident Ratio Schedule

[Scott_B]

I appreciate your answer. It's a shame that the tax summary provided by TurboTax differed between MI and MT--it was filled in in MI, but not so with MT. It's likely a result of the way it's calculated. It would be great if it could be included somewhere (like in the Tax Summary or tax review when you print your return)--that helps reduce mistakes.

Thanks for the response!