My elderly Mom had cashed out an annuity and had state taxes withheld. She lives in Georgia but the withholding was incorrectly for South Carolina. They used my mailing address (SC) since I am her POA and not her residency address which is Georgia. I do her taxes for her. I see postings that say an approach is to file a non-resident form for her in SC with $0 income and get a refund for the SC taxes withheld incorrectly. Is that the best approach and what is the sequence of filing. Do I file Federal, then file the non-resident with SC and then file the GA return. I don't have to wait for the SC refund before filing GA do I? It seems I should be able to file both the SC non-resident and GA in parallel. So, she will have to pay the GA taxes and then count on getting the money back from SC, true?
Or is it the annuity company responsibility to correct - taxes withheld last year.
Annuity income is taxable by your state of residence at the time you receive it.
You need to file her SC non-resident return and report 0 for SC source income to claim the refund.
After entering all information on your federal return, move to the state section and prepare SC before the resident GA return. You can submit federal and states returns at the same time.
No, you don't have to wait for the SC refund before filing GA.
You have until the filing due date April 15, 2025 to pay the amount due on GA return.
Do you need to provide any documentation on the SC state return, like proof of GA residency?
If you attach the 1099 it will clearly reflect income even though the tax form will show zero. So, seems some explanation of what happened may be needed.
If you are not in a rush to receive the refund from SC, you could choose to file that return by mail and attach a letter of explanation. Filing by mail will slow down the processing time though.
If your mother's GA address is used on her tax returns, the SC return could process without an issue since it would show that she is a GA resident.