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wgeary
Returning Member

Moved IA to MO- Not splitting state tax correctly

I moved from one state to another so must pay taxes in both (still work remotely for same company).

 

I put part year resident for both states and correctly filled in the dates I lived in for both.   I cannot get turbotax online to fill out the state forms correctly, instead of portioning between the two it fills out 100% for both states.   This is an amendment at this point, turbotax payed one state in full and $0 to the other (I didn't realize this until the $0 state sent me a letter to pay full taxes).   No matter what I do I cant get it to split the taxes.

5 Replies
Hal_Al
Level 15

Moved IA to MO- Not splitting state tax correctly

What are the two states? The rules and forms vary.  What is on lines 15-20 on your W-2?

wgeary
Returning Member

Moved IA to MO- Not splitting state tax correctly

IA and MO are the states

line 15 - 20.      15 is IA,  16 is full wage, 17 is state income tax amount and 18-20 are blank

Hal_Al
Level 15

Moved IA to MO- Not splitting state tax correctly

I'm not familiar with either of those states. You may want to wait until someone familiar with them replies.  Try changing the your subject (i.e. "Re: Moved IA to MO. Not splitting state tax correctly").

 

That said, this usually works:

At the w-2 screen split the boxes 15-20 W-2 info into 2 lines. On the 1st line leave IA in box 15 but make box 16 the amount you earned prior to the move; leave the IA withholding in box 17. On the 2nd line put MO in box 15 and the MO wages (after the move) amount in box 16; leave box 17 blank. You will probably have to attach a statement to both returns explaining the situation.  Be sure you file a part year resident retun for each state. 

TomD8
Level 15

Moved IA to MO- Not splitting state tax correctly

TurboTax has a help article on this:

How do I allocate (split) income for a part-year state return? (intuit.com)

**Answers are correct to the best of my ability but do not constitute tax or legal advice.
SteamTrain
Level 15

Moved IA to MO- Not splitting state tax correctly

 

__________________________

I used to do IA stuff, but haven't for some time (~2017?).  IT looks like they still do it similarly for Part Year residents when I look at the IA forms.

 

IA does calculate a tax on your entire year's income, but then gives you a pseudo-tax credit on line 48 of the IA-1040 for the taxes assessed on the income you earned/received after moving to MO.  That value comes from the form IA-126......where you supposedly indicated what parts of your total income was earned during the time you were a resident in IA.   Whether that was done properly the first time is not something any of us can know.

 

_________________

MO is one of those states that does part-year resident tax returns somewhat differently....so a lot depends on how you chose to do the MO stuff when you went thru the MO interview.     

 

MO has part-year residents choose whether to file as:

....a) A full-year MO resident, calculating a tax on all your yearly income from both states, but then taking a credit for taxes paid to IA on the IA part-year tax return.  (IA would have to be filled out first)

...OR...

....b) File as a full-year MO Non-resident, and indicating all your income after you moved to MO  "as-if" you were a non-resident of MO with some MO income for that part of the year  (including dividends, interest, capital gains...etc received while in MO).

____________________

 

I suspect b) would be easier, but which way would give you lowest MO tax would depend on a lot of details which would be impossible for us to explain.....and I'm not sure how TTX software helps you navigate those two procedures.

___________________________

Nonresidents and Residents with Other State Income (mo.gov)

 

"Part-Year Resident- An individual domiciled elsewhere prior to moving to Missouri or establishes domicile elsewhere after moving from Missouri. A part-year resident is treated as a nonresident but may determine his tax as if a resident for the entire year.

 

As a part-year resident, you may take either the Missouri resident credit (MO-CR) or the Missouri income percentage (MO-NRI), whichever is to your benefit. On a joint return, one spouse may take the Missouri income percentage and the other the Missouri resident credit. However, one individual cannot claim both!"

____________*Answers are correct to the best of my knowledge when posted, but should not be considered to be legal or official tax advice.*
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