Why is TurboTax showing a full refund for North Carolina for the taxes I had withheld on my W2Gs? My gross income exceeds the Filing Requirements Chart for Tax Year 2023.

[cio]

I have many W2Gs from a casino in North Carolina (I am not a resident of North Carolina). Some of them I had the state taxes withheld and some of them I didn't. From my understanding, I should have to pay 5.25% on all of them, but TurboTax is showing a full refund on all of the state taxes I had withheld.

This is what I have filled out in TurboTax under North Carolina state return:
Income ->Edit -> Continue -> Done With Income -> Continue
This shows Wages Allocation section, which I have the following:
Payer's Name                         Wages                                                          Status
<Payer Name From W2>    <Some value greater than $50,000>     Not NC Source Income

Then after pushing continue this shows the Nonresident Income Allocations:
<Empty>, Federal Income, North Carolina Income While Nonresident
Wages, Salaries, Tips, Etc., <Same value greater than $50,000 from previous screen>, 0
Interest, <Some value>, 0
Other Income/Loss Excluding Sec 457 and Nonqualified Plans, <Total gambling wins from all states (e.g. $20,000)>, <Total gambling wins from North Carolina (e.g. $10,000)>
Then I push continue.

I had <some number greater than $100> withheld in all of my W2Gs from North Carolina but 5.25% of my total North Carolina Gambling winnings is much higher than the amount withheld. I would expect I would owe these extra North Carolina taxes, but instead it is showing a North Carolina refund of exactly the amount I had withheld in my North Carolina W2Gs to the nearest dollar.

[JohnW152]

Nonresidents and part-year residents of North Carolina prorate their taxable income.  This is done by calculating the ratio of their total North Carolina-sourced income to their total income from all sources.  See line 24 of Form D-400 Schedule PN.

This pro-rated amount is carried over to line 13 of Form D-400, resulting in an amount of North Carolina taxable income on line 14 that would be a fraction of your federal taxable income.

It's quite possible that, after this proration and other deductions on Form D-400, your North Carolina taxable income could be zero, resulting in a complete refund of all of your North Carolina W-2G withholding.

That said, you're encouraged to review all of your entries.

[cio]

I don't really have many if any deductions at all on Form D-400 so I would take the standard deduction. As a test, I changed one of my North Carolina W2Gs to an $800,000 gross winnings, $800,000 State Winnings, and only $20 State income tax withheld. Then I add $800,000 to the Nonresident Income Allocations form under Other Income/Loss Excluding Sec 457 and Nonqualified Plans - North Carolina Income While Nonresident. All this does is increase my North Carolina refund by $20, making it still give a full refund even if I had an additional $800,000 win in North Carolina. This does increase the Federal taxes due by over $270,000 though.

I have gone over everything many times but there doesn't seem to be any errors. I can't tell what TurboTax is trying to do on the tax forms unless I pay to file it beforehand.

[DaveF1006]

Depending though how much gambling income there is, you may not owe anything if all you have is gambling income. If your gambling income did not reach the standard deduction of your filing status, then there is no tax consequence to you. 

Here are the standard deduction amounts for North Carolina.  See if the amount of your gambling income reached the threshold of your filing status by looking at the screenshot below.

Also, Turbo Tax sometimes will stick so if you try to play around with different scenarios, it may not work the way you expect. When this happens and if you really need to change a number, it may be necessary to delete your state return and start over.

[r246251]

I am having the exact same situation! I’ve been on the phone with TurboTax for over hour and it makes absolutely no sense why I don’t owe any North Carolina taxes and I’m getting a full refund. I followed the directions in the first response, but I’m still a little confused as to why I would not have to pay. Let me know if you found that your information was correct or an easier way for me to understand why it’s the case. Otherwise I guess I’m going to go to somewhere in person. Thanks

[CatinaT1]

Many things have been corrected in the latest updates to TurboTax. Are you still experiencing this problem?

Make sure you have ran all updates. 

If using TurboTax Online: Clear your cache and cookies. See this FAQ, for your particular browser.

If using TurboTax Desktop: Please see this FAQ.