Kansas Resident - Missouri Non-resident: Spouse being taxed on Missouri income tax return

[schmiller1227]

My spouse and I are both residents of KS. I work on the MO side of the KS/MO border. His income is 100% incurred in KS and he has never lived nor worked in MO. The Missouri income ratio summary page shown for my spouse is 0% as it should be. Why is TurboTax showing that there is Missouri income tax due for my spouse's Kansas income? It's essentially doubling the tax amount that I have already paid, resulting in a large amount due to MO. I completed the nonresident return for MO first, then completed the KS return. Is this a bug in the software?

[TomD8]

Perhaps this explains it:

"Your Missouri return must begin with your total income (federal adjusted gross income) as reported on your federal return, even if you have income from another state. Your deductions and exemptions apply to your total income, not just part of it. The return is computed as if you are a full year resident and is then reduced by the Missouri income percentage (Form MO-NRI). The result is a prorated Missouri tax, based only on the income earned in Missouri."

https://dor.mo.gov/faq/taxation/individual/non-resident.html

[schmiller1227]

Income is automatically pulled in from my federal return, it does not provide an option for editing within the MO return.  Then the MO adjusted gross income is split between my spouse and I, the amounts appear to be correct and shows that 100% of my income came from MO and 0% for his, but still shows an amount in the MO income tax column for his income.   This is not the first year we've filed a MO return and have not had this issue before.  What's the missing link? 

[TomD8]

"...but still shows an amount in the MO income tax column for his income."

Are you referring to Line 35S on the MO-1040?

[schmiller1227]

Correct.  That line has an amount in it but it should be zero since he did not work or live in MO. 

[KeshaH]

We'd be happy to take a look at your return so we can see exactly what you see and help come to a resolution. The return will be scrubbed and will not include any of your personal details.

Once you're logged in to your account,

- on the left hand panel, click on Tax Tools and then choose Tools

- on the pop up window, select Share my file with Agent

- you'll see a message saying you'll give us a copy of your tax return. Your personal information will be changed so we can't see any private information.

- click okay and you'll get another message with a token

Reply to this message with your token and we'll take a look to see what we can find.

[JayRockChalk]

I am also having the same issue. My spouse and I both live in Kansas but I work in Missouri and my spouse works in kansas but my spouses income keeps getting added to the gross.  My spouse should not be included because they only work in kansas.

[schmiller1227]

@JayRockChalk I figured it out…by switching to H&R Block.  Did not have the same issue.  

Go Jayhawks. 

[KeshaH]

If you'd like, we can look at your return and see exactly what you see to  help come to a resolution. The return will be scrubbed and won't include any of your personal details.

If you're using TurboTax Online:

Once you're logged in to your account,

- on the left hand panel, click on Tax Tools and then choose Tools

- on the pop up window, select Share my file with Agent

- you'll see a message saying you'll give us a copy of your tax return. Your personal information will be changed so we can't see any private information.

- click okay and you'll get another message with a token

If you're using TurboTax Desktop:

• Click on Online in the top menu of TurboTax Desktop for Windows
• Select 'Send Tax File to Agent'
• Write down or send an image of your token number and state then place in this issue.
• We can then review your exact scenario for a solution

Please reply to this message with your token so that we can further assist you. Let us know all the states, if any, are included on the return.

@JayRockChalk 

[JayRockChalk]

@KeshaH 

1272715

Kansas and Missouri

[KeshaH]

Thank you for providing your token. I've reviewed your MO return.

Your Missouri tax liability does not include any tax liability for your spouse. 

The Missouri return starts with Federal Adjusted Gross Income, which includes both you and your spouse's income. 

What can seem confusing is that Missouri has an income ratio that calculates each spouse's percentage of income compared to the total. 

For example, if your total income is $100,000, and you earned $60,000 and your spouse earned $40,000 - your income percentage is 60% while your spouse's income percentage is 40%. This percentage is used to calculate each spouse's Missouri taxable income after deductions. It's not what's used to calculate tax liability.  

After calculating each spouse's portion of Missouri taxable income, the form then calculates the tax liability for each of you separately as if you were full year residents. Then, your Missouri Income Percentage is applied based on how much of your income was earned in Missouri.

On your return, since none of your spouse's income was earned in Missouri, their Missouri income percentage is zero. When this percentage is applied their Missouri tax is reduced to zero. You will be able to verify this on the Missouri return on lines 29 - 36 when you print a copy.

@JayRockChalk