Non resident state taxes

[alexncathy]

Can I use free file to submit multiple non-resident state returns and if so how do I allocate the amounts to each state when my W-2 only shows one lump sum  to my resident state?

Thanks

[DanielV01]

If your return qualifies for TurboTax Free, then you can file up to 5 state returns for free also.  If you need more state returns than that, then you would have to use the TurboTax CD Software instead.  

To allocate amounts to each state depends on the states.  For many state returns it is fairly easy on the return:  calculate out the amount to each and there will be a location on the state return interview where you can enter the amount directly into the program.  Some states have other requirements.  And also be aware of reciprocal agreements, if you live in a state that has a reciprocal agreement with any other states.  

You could, if you wish, and without providing personal information, state your resident state and the non-resident states.  

[alexncathy]

Thanks for the response, it’s helpful. The non resident states are not reciprocal. I have 3 besides resident state. The problem is that on the w2 from the employer all went to resident state instead of divided among the non-resident states. Do I need a corrected w2 from employer or in which screens of free file do I show what amount that went to each non-resident state? Do I do this in the income section at beginning or do I input the numbers exactly as they appear on the W2 and divide between states on each non-resident return afterward?

Thanks for your help         

[DawnC]

Did you work from home in your resident state, or did you travel to multiple states and work while physically being located in the other states?   If you stayed in your resident state, you most likely do not need to file the non-resident returns.   

Do I need to file a nonresident return for an out-of-state employer?    If you do need to file non-resident returns, there is a link at the bottom of this article with instructions.  You would not need a corrected W-2 and yes, enter the W-2 exactly how you see it.   You will enter the non-resident states in the ''Other State Income'' section and allocate the amounts on the state returns - but only if you did the work while being physically present in the other state.  

[alexncathy]

Thank you, the information was very helpful. Yes, I physically did the work in another state. I have entered the W2 exactly how I received it and have entered the non-resident states in the "Other State Income" section. My question is now, when I get to the state return, I do not see where to enter the amount I earned in that state. It is for the state of Alabama and after answering all of the questions I do not see where to enter the portion I earned in AL from the total income on the W2.  Is it under "Federal income not taxed by Alabama? Could you tell me where to enter the amount earned in AL?

Thanks so much

[AmyC]

When you enter the AL, go through the income section. It will ask you about each type of income on your return. You can enter the AL portion. If done, you can go through and see a screen You've Finished Your Alabama Return. You can update the Income section.

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 resident state and begin again.

1. First, prepare your non-resident  returns. This creates your tax liability for the non-resident states. How do I file a nonresident state return?
2. THEN prepare your resident state 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.

If prepared out of order, verify your resident return is showing credit for each of the other states.

[alexncathy]

Thank you, this information is very helpful. I finished Federal and will save my resident state for last which will be CA.  The first state I open is my non-resident state of AL. It recommends residency status and I change it to non-resident and then it asks if I will be submitting a CA resident return and I say yes.  But, when I get to the income portion, the screen says that for each type of income it will ask me if it was earned in Alabama. When I hit the continue button there are no questions about where income was earned. When I get to the "You've finished you Alabama Return", I press update on the income section and it again says it will ask me questions about what part of my income was earned in AL, but then takes me to the finished Alabama return page again. Can you tell me how to get to the screens which will allow me to input what part of my total income was earned in AL? 

Thanks

[BillM223]

"The first state I open is my non-resident state of AL. It recommends residency status and I change it to non-resident"

I don't understand this. If in the Personal Info/My Info, you did not indicate that you lived in Alabama at any point, at the start of the TurboTax interview when you were asked to confirm your residency status, it should have already been nonresident - you should not have to have changed it to nonresident. That is, you could have just answered NO, you don't need to change your residency status.

Did you indicate in the Personal Info/My Info section that you lived in Alabama at some point in 2020?

[alexncathy]

I went back to my info screens and the residency of CA is correct. I had several states listed under the "other state income" section so I deleted them and just left AL so as to start with that one. Now when I get to state it correctly  pops up as "non-resident" but when it says it will ask me questions "for each type of income you received in 202,, we will ask you if it was earned in AL" When I press the continue button, it does not take me to screens that ask me these questions, it ask about money earned  before 2020 and then takes me to the deduction screens.  I need to know how to get to the screens to input what part of my wages were earned in AL.

Thanks