My husband works and pays rent in KS. Our permanent residence is in CO, where I work. He gets a CO State Retirement with a $20K Income Reduction for CO Taxes. How do I do our State Taxes in Turbo Tax as CO Inc is including his KS income?

[DMarkM1 · Accepted solution]

That is correct. CO as your resident state taxes all income from all sources. Assuming you are filing a joint federal return KS requires your KS return to be the same.  You file a joint non-resident KS return and only allocate your spouse's KS income to KS.  You would then claim a credit for taxes paid to another state on your CO return for the double taxed KS income.  

Complete the KS return first after entering all the income deductions in the federal interview.  Take note of the income taxed and the tax imposed by KS on that income.  Those numbers will be used on your CO return to claim the credit for taxes paid to another state.