Part year resident income reported in both states on W2

[DPRichards]

I lived in Arkansas for 6 months then moved to Utah.  On my W2 all of my wages are reported as Arkansas income and a portion of my income was reported as Utah income.  I paid state tax on all income in Arkansas but there was no taxes paid to Utah for the portion on my income as part time resident of Utah. How is this to be reported on a Utah part year resident return?  

[DavidD66]

First of all, your tax withholding does not determine how your state income is allocated on your tax returns.  Since you lived and worked in two states, you will file a part-year resident return for each one.  As you are preparing each state return, there will be a page where you allocate the portion of your income that you earned in that state and/or while living in that state.  It may or may not be the same as what is on your W-2.   

If you did not earn any income in one state while living in another, the income allocated to each state will add up to the total income reported on your W-2 (Box 1).  If you lived in one state while working in another, the amounts allocated to the two states will added up to more than the total income on your W-2.  In the case of the later, the state you resided in while working in the other state will issue you a credit for tax paid to the other state so that you won't be double taxed.

[DPRichards]

Thank you!

As a follow-up....my wife received a 1099R for the distributions from her State pension plan.  I entered that into TurboTax  for the Federal Return, and that is all good.  In doing the state returns the amount was automatically plugged into the partial year return for Arkansas but none of the funds were disbursed when we were residents of Arkansas and we were living in Utah.  I am unable to remove the amounts from the Arkansas return.  Is the income taxable in both states?  If not, I would assume it would be taxable in the state we are residents at the time of disbursement (Utah).  Is that a correct assumption?  In TurboTax, how would I remove it from Arkansas or should I just not report it in Utah?

[AmyC]

You are correct. Received in UT so AR should not be taxing it. In the federal section, for the 1099R disbursement, try entering UT as the state. That should get it moved properly.

[DPRichards]

Thank you for your response.  I tried what was suggested and it made no difference in the double taxation paying both states.  I then went to the form itself and did an override on the Arkansas form to show  the correct amount earned while in Arkansas (which was basically 0).  I ran the check and it returned with no errors.  I continued to e-file my returns.  When it got to Arkansas e-file, it would not let me file with the overrides.  This was after I had already paid the $25 e-file fee for Arkansas.  It made me "undo" the override to continue filing.  So in essence, I just paid double state tax on the amount.  Tax to Utah and tax to Arkansas.  Looking at the laws, this is not supposed to be allowed.  I think TurboTax has an issue.  I am not sure what to do at this point.

[AmyC]

 Since you filed with the income being double taxed, you will need to do an amended return and mail them the other state return as proof of it already being taxed - once the original return is settled.

With UT as the only state listed on the 1099, it should have worked. I am sorry you ran into a problem.

Save a copy of the original return before doing an amended return. See: 

• how to file an amended return.
• I need to amend my state return.
• Can I e-file my amended state return?