Part year resident question

[bk2848]

I lived in MN for the first 3 months of 2020, then moved to IA for the last 9 months. still working for the same company.  My W2 shows the taxes withheld for both MN and IA with appropriate % of withholdings for each state.

When I completed my MN state return, it was using 75% of my federal gross income as taxable for the MN state calculation, not the 23% of the gross that was on the W2. Total federal gross minus "Minnesota subtractions" was 75% of my federal gross stated as taxable.  I calculated my interest and capital gains from the dates when those items occurred. After completing the MN return, I have a small amount I need to pay in to MN (0.2%).  

When I completed my IA state return, it asked about part year resident credit.  The value entered for my "Joint Iowa Sources" was 70% of my federal gross, pulled from my W2.  It then asked me for the "Double Taxed Income" between MN and IA.  I entered in the 70% value as it appears that MN was using my IA income.  The 70% is lower than the 75% value from the MN return (the 5% difference was capital gains sold in MN).  I also entered in the "Tax Amount Paid" to MN as the actual amount withheld for MN.  It then asked me for the "Total Amount of Gross Income Taxed by Minnesota" with the description of "Part Year residents only, enter the amount of gross income you received while you were an Iowa resident that was taxed by Minnesota".  I used the 70% value as it again as this was the taxable IA income that appears is being used by MN.

It's now giving me a substantial refund in IA (1.7%).  But because of the confusing nature of how much is actually taxed by each state.  I just want to make sure I am properly entering the values in those state tax credit fields.

Thanks

[MaryK4]

A Part Year resident only reports and pays tax on all income earned for the time they were a resident of the state.  You would not enter the Minnesota income on the Iowa return for the tax for credit paid to the other state (unless you still worked in Minnesota after you moved to Iowa in which case you would report it).  

For Minnesota, you should have 75% taxed as part year income and Iowa should have 25% of your total income taxed for the part-year state return.

[bk2848]

Ok, that makes sense about not using the credits, since the income should be split appropriately,  not necessarily both taxing that same income.

I lived in Minnesota from Jan to March and Iowa from April to December, wouldn't Iowa be 75% and Minnesota 25%? 

Why is 75% of my federal gross being taxed by Minnesota?  These are the numbers that TurboTax is entering for Minnesota, not numbers I'm entering.  The screen shows 100% Federal Gross income, then takes roughly 23% that was Minnesota taxable and subtracts that as "Minnesota Subtractions" .  Then it says Minnesota Taxable Income is 75% of the gross.

Is there a change date residency somewhere that I might have not entered correctly?

[SamS1]

Did you indicate in Minnesota you were a part-year resident?  Assuming you were a full year MN resident in 2019, make sure and indicate your residency status has changed. Your return should include the form M1NR, which will allocate your MN income from your total income.  You should see this allocation in TurboTax.   

Same with Iowa, you would be considered a part-year resident.  On the Iowa return, your Iowa tax will be calculated on your total income less adjustments, net Federal taxes, and standard or itemized deductions to equal your Iowa taxable income.  Your tax is calculated then you will received a part-year credit for the percentage your Iowa income is to your total income.  This percentage is calculated on the IA 126., same as the M1NR