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dwigton
Level 1

State tax from one 1099-R withheld incorrectly

I moved last year (2019) from Colorado to Arizona.  One of my pension funds did not change my residence until about 2/3 through 2020, so both Federal and State income are applied to Colorado incorrectly (separate 1099--Rs.  How do I correct this?

1 Best answer

Accepted Solutions
DawnC
Expert Alumni

State tax from one 1099-R withheld incorrectly

You are going to need to file a non-resident return to get back the withholdings from Colorado.  In these cases, you will have to file a nonresident return to recover the erroneous withholdings. On the nonresident return, you'd declare earnings of 0 so you can get a full refund for the taxes withheld.    Don't enter any dates of residency for CO on your federal return if you did not live there.   See the instruction link at the bottom to see how to fill out the personal information section to generate a non-resident return instead of a part-year resident return.  

 

Generally, you’ll need to file a nonresident state return if you made money from or had withholding from sources in a state you don’t live in.

Some examples are:

 

  • Wages or income you earned while working in that state
  • Out-of-state rental income, gambling winnings, or profits from property sales
  • S Corporation or partnership income
  • Beneficiary income from a trust or estate
  • For active duty military: non-military income earned outside your state of legal residence
  • If your employer/pension office withheld taxes for the wrong state

Related Information:

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**Mark the post that answers your question by clicking on "Mark as Best Answer"

View solution in original post

3 Replies
JeffreyR77
Expert Alumni

State tax from one 1099-R withheld incorrectly

You can reduce the amount of income that is taxed to Colorado by navigating through your Colorado part-year resident return to the screen Here's the Income Colorado Handles Differently and select at the bottom of the screen Miscellaneous Subtractions:

 



On the next screen you can enter the amount of over reported pension to Colorado:

 

In your Arizona part-year resident return, you will navigate until you reach the Other Adjustments screen where you can enter the amount you subtracted out of your Colorado return to be included in your Arizona income.

 

dwigton
Level 1

State tax from one 1099-R withheld incorrectly

Yes, but select the entire amount?  I didn't live any part of the year in Colorado, but my retirement account (defined benefit pension) kept on withholding for Colorado instead of Arizona.  So the truth is I did not earn ANY income while living in Colorado last year, but over $700 was withheld before I realized what they had done and corrected it.  Now they have reported it on my 1099 as if I was a part year resident.

DawnC
Expert Alumni

State tax from one 1099-R withheld incorrectly

You are going to need to file a non-resident return to get back the withholdings from Colorado.  In these cases, you will have to file a nonresident return to recover the erroneous withholdings. On the nonresident return, you'd declare earnings of 0 so you can get a full refund for the taxes withheld.    Don't enter any dates of residency for CO on your federal return if you did not live there.   See the instruction link at the bottom to see how to fill out the personal information section to generate a non-resident return instead of a part-year resident return.  

 

Generally, you’ll need to file a nonresident state return if you made money from or had withholding from sources in a state you don’t live in.

Some examples are:

 

  • Wages or income you earned while working in that state
  • Out-of-state rental income, gambling winnings, or profits from property sales
  • S Corporation or partnership income
  • Beneficiary income from a trust or estate
  • For active duty military: non-military income earned outside your state of legal residence
  • If your employer/pension office withheld taxes for the wrong state

Related Information:

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
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