Significant error in South Carolina SC1040TC Worksheet

[jefflarson46]

This is the Credit for Taxes Paid to Another State tax form, on the sC1040TC Wksht line 1 (Gross Income) the Turbo Tax program adds the South Carolina Subtractions line 42 from Non-Res Schedule instead of subtracting it from the total gross income.  These are subtractions, not additions and make the total gross income more than it actually is, which makes for a significant difference in tax owed.

This is clearly an error in the program, and I had to spend a lot of time determining what went wrong - not what I expected when I purchased both Turbo Tax and an additional State Tax form.

I have to manually enter the correct amount, but I'm not even sure what will happen when I file, or what other issues there are in the program.  I would like to know what Turbo Tax intends to do to correct this.

[SusanY1]

This is how the form is designed to work.  SC 1040TC Line 1 is supposed to include all taxable income for which the credit applies.  The amount of income that was taxed by another state and South Carolina will then show on Line 2 of the worksheet.  

Income that is excluded on the non-resident schedule is not eligible for the tax credit (it is either excluded or eligible for the credit.)

South Carolina nonresidents are not eligible for the credit for taxes available to another state. This credit is available for part-year and full-year residents only. 

Nonresident income which is excluded from the taxation isn't eligible for the credit.  The credit applies only for income that was taxed in both South Carolina and the other state - that is why the income is added back in on the worksheet.  

[jefflarson46]

Thanks Susan, but this actually then adds items subtracted in the SC calculations, back on to the total gross income, making it more than it was originally.  In the Data Source file it says:

Schedule NR Line 16b                                                         - This is my total income for SC

Less

Schedule NR Line 42-Total Subtract                                 - This subtracts a portion of mil retirement/other items

*This amount is listed as the modified adjusted gross income on the Schedule NR

But then in the actual Turbo Tax calculation it adds it instead of subtracting, again making the total considerably more than what I earned while living in SC (Total Income Line 16b).  The data source file says "Less" but the program adds instead, so I end up with an inflated number.  Again, this is not related to credits that aren't allowed, but an error in the calculations that instead adds in an amount that was never originally subtracted. 

Thanks,
Jeff   

[SusanY1]

Thank you for the additional information!  I will take some time to try to replicate this and look into it further.

[jefflarson46]

Thank you - and upon reflecting on the portion that "South Carolina nonresidents are not eligible for the credit for taxes available to another state." I was not tracking this, is it from SC tax regulations?

As a part year resident, I have the option to file as a non-resident, and when that is selected in Turbo Tax it still provides the tax credit for taxes paid to Georgia, even though I'm filing as a non-resident. However, as I noted before it calculates the credit wrong.

So either way, something is going wrong with how TurboTax is calculating it, would appreciate any help.

Thanks

[DaveF1006]

Normally a non-resident return will not give credit paid to other states. Let me explain the flow.

1. if you work in South Carolina but live in Georgia, you will file a South Carolina non-resident return first and then,a Georgia resident return. 
2. When you file your Georgia return, you will be given credit for the taxes you paid to South Carolina. It does not work the opposite.  
3. the key is to file your South Carolina non-resident return first.

[jefflarson46]

Thank you - I actually work in Georgia but live in South Carolina.  I moved here and became a resident of SC in Sept 2019.  As a part year resident of South Carolina I have the option to file as a nonresident.

I already completed my Georgia nonresident tax forms.  The taxed I already paid to Georgia I would like to have credited in SC.

Thanks,
Jeff

[CraigSh]

Turbo Tax 2020 is taxing my 100% Utah income in the SC return and I am a Utah resident. This is NOT proper. My wife has SC income of $1400 earned before she moved to Utah and is still an SC resident. She has earned no income in Utah. The instructions for your "help" with the SC tax form were written by someone that speaks using a brain that is apparently foreign to the concept of communication.

"As a non- resident, you will report only income earned in South Carolina." from SC DOR

[SusanY1]

In your case, you will need to make some adjustments on the South Carolina return to remove the Utah return for your income, since you were never a South Carolina resident and the income wasn't taxed in South Carolina.   This situation isn't typical, so it isn't addressed very clearly or very well on the forms and instructions. 

Adjust your Utah income in the South Carolina return in TurboTax by going to "Other Subtractions".  In the box "Description of Other Subtractions From Income" list a description such as "Nonresident spouse Utah income" and then list the dollar amount of income in the amount of income.  You can use whatever description here makes sense to you, mine is just an example. 

This will subtract the nonresident income from the South Carolina return.

Utah allows spouses with separate state residences to use a different state filing status than federal filing status.  Since this is permitted in Utah (but not in South Carolina), you may wish to file separately in Utah to make things a little easier. 

To do this in TurboTax, since all state returns are made up of data that flows from federal entries you will create "mock" separate federal returns.  Detailed instructions for this process can be found here: Filing separate state returns

@CraigSh

[ColoYooper]

My wife and I recently retired from our jobs in Colorado and moved to South Carolina as residents.  I am attempting to get the correct income entered in the SC1040TC wkrsht Line 1A.  The only income we have received since becoming residents to SC has been from our 401Ks, but TurboTax insists on placing the full value from our Federal Form 1040 Line 9,  This value was correctly modified and taxed with the Colorado return, but is way TOO large to be taxed again for South Carolina. Thanks ColoYooper

[ErnieS0]

South Carolina gives you two filing options – you can either file as a

1. Resident OR part-year resident filing as a resident
2. Nonresident OR part-year resident filing as a nonresident

If you file as a resident, South Carolina will pull all your into South Carolina. Go to the screen South Carolina Residency Information and change to Nonresident OR part-year resident filing as a nonresident.

@ColoYooper