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New Member
posted May 18, 2021 3:10:07 PM

multiple state taxes

We live in Wisconsin but my husband operates a self employed business in California. We make all of our money in California. on our 2019 taxes it asked us what amount was made in Wisconsin and we stated 0 and owed nothing to Wisconsin. 2020 it didn't ask us that question and just filled in info from our federal return and is stating we owe 400 to the state of Wisconsin. Do we pay Wisconsin for money made in California?

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1 Replies
Expert Alumni
May 18, 2021 3:38:54 PM

Your resident state taxes all income but gives a credit for income taxed by another state.  Please carefully follow these directions.

You will need to prepare the states in a special order. You may need to delete both states and begin again.

 

  1. First, prepare your non-resident CA return. This creates your tax liability for the non-resident state. How do I file a nonresident state return?
  2. Then prepare your resident state WI return and it will generate a credit for your income already being taxed in the non-resident state.
  3. The credit will be the lower of the state tax liabilities on the same income. You may owe your resident state.

It isn't possible for the program to create a credit before it knows the liability. Your returns may be wrong if you do not prepare the states in this order.

 

Related: Why does tax-free income from Alaska, Florida, New Hampshire, Nevada, South Dakota, Tennessee, Texas, Washington, or Wyoming get taxed on my resident state return?