Moved to Missouri from Washington, TurboTax missing MO-NRI

[BrendenH]

Hi all,

I moved to Missouri in the middle of July 2019 for a job that started on August 1st. Up to my move, all of my income was from Washington State, which does not have an income tax. My understanding is that I need to file a MO-NRI form so that I only pay state taxes on the Missouri portion of my income. I am using TurboTax Deluxe, purchased from Costco via a download code. When I go to review my taxes, it appears that TurboTax is calculating my Missouri taxes based on my full year of income, not the portion actually earned in Missouri. I cannot find the MO-NRI form at all. Am I correct in my understanding of the situation, or do I really owe Missouri taxes on money earned before I had a domicile in the state?

[JotikaT2]

Your understanding is correct.  You only need to pay Missouri taxes on the income earned when you were a resident there.

Missouri allows you to either claim a credit for taxes paid to the other state before becoming a resident by using Form MO-CR, OR you can use Form MO-NRI to just pay taxes based upon your Missouri income percentage.

Since Washington does not impose income taxes, you should file Form MO-NRI. 

You will need to confirm your input in the My Info section of the program to ensure you are preparing the MO return as a part-year resident.

1. Click "Edit" to the right of your name 
2. Confirm your input under #2 "Tell us the state(s) you lived in" 
3. Confirm the rest of the state-specific questions here as well including the "previous state of residence" and "date you became a resident" of the state on December 31, 2019. 
4. Do the same for your spouse if you are married filing jointly. 
5. Go back to the personal information section, and verify the mailing address and "Other state income" section. 

Once you enter this information, you should go back into the W-2 input under income. 

Select Edit for this W-2 and scroll down to box 15, State & Local Taxes.  Confirm your input per state as reported on your W-2 Forms.

Go ahead and go through the state interview questions again.  MO should treat you as a nonresident even though you were a part-year resident.

[BrendenH]

Thanks for the quick response. I went back to the "Personal Info" section like you suggested and I had all of that information correctly added. TurboTax should provide me the option for a partial-residence Missouri filing, but when I complete state taxes, it imports my full income for the entire year. 

As I typed this, I discovered the issue: 

TurboTax asks if I am filing as a "part-year resident filing as a resident" or "part-year resident filing as a nonresident" of Missouri. Selecting the first option, which I did because I was a partial-year resident of Missouri and my reading of the Missouri Dept. of Revenue website suggested that I need to file resident income taxes, lead TurboTax to treat ALL of my income as taxable under Missouri law, but it is only when I select "filing as a nonresident" which isn't accurate given I established a domicile in Missouri during 2019, that I am given the option to file a partial year return. I really dislike the way TurboTax frames and explains these options. 

I think I got this sorted out now, but I am considering having a local tax expert look over every thing. This actually makes me doubt TurboTax and I will probably consider other preparation services/software for the next year. 

[JotikaT2]

The Missouri instructions actually do give you the option to either file as a full year resident and claim the credit or as a nonresident.  They don't really provide the option to specifically file as a part-year resident.  

I'm including the link to the instructions for your reference as well.  As you scroll down in the link, you will see in the Part-Year Resident instructions, it says "a part-year resident is treated as a nonresident but may determine his tax as if a resident for the entire year".  This just happens to be one of the states that can treat you as a nonresident even though you were technically a part-year resident.  

Missouri filing for part-year resident instructions

I am happy you were able to get it sorted out so your income is not being taxed when it isn't taxable in Missouri.

[brendanf]

This is all very helpful, and I wish I had found/read it before submitting my returns! (I moved from Washington to Missouri and my Missouri estimated state tax is way higher than it should be)

Should I pay my MO estimated tax, and then amend my federal and state returns after the state return has been accepted (since the deadline is tomorrow)? Will I then be able to receive a direct deposit refund, or will I have to apply it towards next year's taxes?

[astx813]

@BrendenH I am SO glad I found your question, and I'm 100% with you! TurboTax folks, this was a huge miss that will has me seriously questioning if I'll use your software anymore (and I've been using this since at least 2008).

I also entered my move details (in July, WA to MO, just like Brenden) during the initial "tell us about yourself" and at no point did the walkthrough lead to filling out the MO-NRI. In fact, I started filling it out after I found this thread and when I resumed the walkthrough, it wiped out my changes! I'm still (re)filling out the NRI form, but it looks like this gap in your software led me to pay almost $5000 to MO for an IRA conversion I did as a WA resident. My thrill at getting this money back (whenever MO processes the amended return....) is tempered by the fact that I shouldn't have paid that in the first place! Words cannot express how miffed I am with you guys right now. Brenden, meet me at Schlafly, we could use a drink!

[astx813]

@JotikaT2 "Go ahead and go through the state interview questions again.  MO should treat you as a nonresident even though you were a part-year resident." This did not work for me. Both my W-2s were entered properly and at no point did the software treat me as a non-resident or lead me to the NRI form.

[BrendenH]

I was able to get my tax refund from MO via direct deposit. Just be sure to submit an MO-NRI tax form to the state. Since you just moved here this tax year, MO allows you to file as a non-resident. 

[BrendenH]

While Missouri gives you the ability to file as a non-resident, TurboTax does a terrible job of explaining that in their software system. So while you are correct, technically, TurboTax's system can lead to overpayment of taxes to Missouri if you don't investigate the Missouri DoR website and find the policy yourself. TurboTax, based on its phrasing, would have had me paying additional taxes to Missouri on income that was earned prior to my move. Instead, I received a very modest refund from Missouri. 

[BrendenH]

I am glad it worked out for you in the end and that you are getting money back. I am also considering moving to another service after this experience. Good luck!

[Stlguy_30337]

TurboTax has not correctly the nri error as of March 2023. 

[MichelleLO]

The form is available. If you are using TurboTax Online, log completely out of the TurboTax website, then clear your browser's cache and delete cookies. If you are using TurboTax CD/Download software, you will need to update the program. 

@Stlguy_30337