North Carolina incorrectly calculating non-NC income?

[mrbell394]

I moved to North Carolina in March 2023 and the state tax section has asked me to identify which sources of my total federal income are non-NC or NC-sourced income. I have correctly inputted my W2s and have correctly identified which sources of income are NC-sourced, however there is still a $2k discrepancy in what I can calculate as my NC-source income based on my W2s and the income that the NC state tax section has calculated as non-NC income. 

[DMarkM1]

To help us better analyze your situation please provide more clarifying information on the $2K discrepancy.  Your W2 shows what amount belongs to NC?  You calculate what amount belongs to NC?  What amount are you seeing that TurboTax has calculated as non-NC?  What is the total wages (W2 box 1) amount?  Are there other income sources besides wages being allocated?  

[mrbell394]

1) My W2 shows that $67,454 belongs to NC. I calculate the same amount. 

2) Turbo Tax is calculating $14,882 to income not earned in NC.

3) Based on my calculations and according to the W2 - $17,507 should be the amount of income not earned in NC.

[DMarkM1]

The only place I see a non-NC entry wages/income amount is on the "Wages Allocation" page in the NC interview in the "Income" section.  That number is not calculated but transfers from the W2 entries in the federal "Wages & Income" section.  On the NC "Wages Allocation" page you can adjust the numbers that transferred in or change their status (not NC, resident  NC, NR NC, PYR NC, etcetera). 

If on the "Wages Allocation" page there are some entries "greyed out" that are incorrect, you can go back to the applicable W2 and correct the state amounts there.    

Ultimately, NC does not use the amount of non-NC income in calculating NC taxes.  NC starts with the total incomes entered in the federal interview and the amounts allocated to NC in the NC interview to calculate a proportion that is applied to the NC resident tax to arrive at the part-year/non-resident tax.  So as long as those are correct the NC tax will be correct.       

[mrbell394]

Thanks for the help. When I allocated my wages to non-NC and NC sourced income (which you are correct, is feeding from my total federal W2 page), the total non-NC income is still $17,507. 

Net, according to my W2 my NC income should be $67,454. 

[AmyC]

On the W2 entry in the federal section, do you show NC wages as the full taxable amount? The federal entry needs to be correct to flow to the state for you to allocate the entire amount to NC. Clearly, there is a problem in the allocating if you are missing $60k basically and it needs to be pulled in from the federal.

The state section of the W2 often needs to be changed to show reality vs whatever the employer puts on there. The state has a copy of your W2. The W2 state entry is your chance to show what is correct.