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Taxes not calculated correctly for partial residence

I lived partially in California and then moved to Utah in 2022, and am filing my taxes now for that year, as I forgot to do so last year. I'm ready to submit them but I believe I've found a bug in the way it's calculating my UT taxes.

 

According to my paycheck and W2 it says I paid $3,222 in taxes to CA in 2022 and $5,395 in taxes to UT in 2022. My W2 also says my total wages were $151,739, with $40,808 being CA wages and $110,930 being UT wages.

 

However, after importing this information into turbotax, it's telling me the following:

 

utah taxable income is 148,739
standard itemized deductions is 12,950
utah tax is 7,214 (????)
total taxes is 7,214 (???)
total taxes and contributions is 5,234 
tax due is 5,234  (??????)

 

I have a strong feeling there is a bug here that is making my turbo tax app use my total taxable income to calculate my UT taxes, rather than my UT taxable income, and as a result it thinks I owe UT more money than I really do.

 

I actually plugged this data into chatGPT just now and it is telling me that if we indeed apply that same 4.86% tax rate against the 148k number, we get exactly $7,234, which it thinks is how much it thinks the UT tax is, and if we apply the 4.86% to the 110k UT taxable income we get the correct number of 5.2k.

 

What should I do here? I'm worried if I continue to file this report it's going to cost me a lot of money in taxes I don't actually owe. Also can someone explain what's going on 

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1 Reply
MonikaK1
Expert Alumni

Taxes not calculated correctly for partial residence

Each state has its own laws and tax rates. They also have provisions to help residents avoid double taxation, such as by allowing credits for taxes paid to another state. 

 

If you were a California resident for the first part of the year, you would file a California part-year resident return and a Utah Resident return.

 

Prepare the part-year resident California return first. Only your income earned in California would be taxed there. Note the tax liability for California (not the withholding or the amount due with the return, but the actual total California tax computed). See here for California's residency rules.

 

Then, you may be able to take a credit on the Utah return for taxes paid to California - IF there was any duplication. From the date you become a Utah resident, Utah will tax you on all of your earnings including those from another state. See here for Utah's rules.

 

You can delete the state returns and prepare them again if needed in order to get these results.

 

See also this TurboTax article and this one on multiple-state situations.

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