You will need to file a nonresident tax return for North Carolina and a resident tax return for South Carolina.
On your South Carolina tax return, you will be able to claim a credit for any taxes paid on the income from North Carolina. This ensures that you are not taxed on the same income twice by two different states.
To ensure your return is calculated correctly, you will need to review/correct a few items:
In the My Info section of TurboTax, confirm that you have entered the correct state information:
- Click Edit to the right of your name
- Confirm your input under #2 Tell us the state(s) you lived in
- Go back to the personal information section, and verify the mailing address and "Other state income" section. Be sure to answer yes to the question asking "Did you make money in any other states?".
Please note the following as it will affect the calculations:
When you are preparing more than one state return, make sure you prepare the Non-resident North Carolina income state tax returns first. Be sure to answer the questions correctly to ensure only income sourced to that state specifically are reported.
Once you have entered all of the nonresident state information, then start your South Carolina resident state income tax return. This will ensure you receive any credits for taxes on income which may have been taxed in North Carolina.
Proceed through the screens in your South Carolina return until you see Credits and Taxes.
- You should see Credit for Taxes Paid.
- Be sure to select Taxes Paid to Another State.
- You can edit your information here if needed but the taxes paid to the other state should be listed in this section.
This will ensure you receive a credit on your South Carolina tax return for any taxes paid to North Carolina and will avoid any double taxation.
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