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Income reporting in multiple states

I have been a NC resident the entire year.  I have an LLC ownership interest in Wisconsin that generates income and delivers a K-1.  I need to file NC and Wisconsin returns.  When doing my NC and Wisconsin returns, Turbotax pulls over from my Federal return and then allows me to allocate/adjust income and deductions relevant to NC and Wisconsin.  Issues:

 

1.  1099-Interest income - Turbotax pulls over 100% of Federal return 1099-Int income.  This interest income is NOT taxable by Wisconsin.  It is taxable by NC only.  In the step by step flow, Turbotax is not providing a way to allocate/modify the Federal Interest number.  Turbotax does allow a step to allocate Dividend and Capital Gain modifications but NOT 1099-Interest.  I couldn't overide/adjust it in the Forms section either.  The only way I could find a way to offset/remove the Interest income was to put something in the "Other Adjustments" area which shows up on line 28 of my Wisconsin return.  Why doesn't Turbotax allow ability to modify Federal Interest amount like it does for Dividends and Capital Gains?  Is there some other way to make the adjustment other than how I have? 

 

2. US Government securities income -  Turbotax's  Federal return step by step asks for how much of the Dividends income is from US securities as this income is NOT taxable by any state.  I can clearly see in my NC return the elimination of the US Government securities income from what Turbotax brought over as taxable income from my Federal return.  On my Wisconsin return, my US Government Securities income is INCLUDED.  Similar to Interest income issue above, I can't find a way to eliminate it other than through the "Other Adjustments" section which shows up on Line 28 of my Wisconsin return AND a Schedule M is added to the Wisconsin return to show the details of Line 28.  Is there another way?

 

The Wisconsin return looks odd with Taxable Interest showing on line 2 and Ordinary Dividends on line 3 when both should be zero.........then on line 28 both are "removed" via Other Adjustments and adding a Schedule M to show the detail what is on line 28.  Why doesn't Turbotax allow modification of the Interest and Dividends lines for these things or am I missing something in Turbotax?  Is this a Wisconsin requirement to show these dollars going in and out or this a choice of Turbotax?

 

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1 Reply
MarilynG1
Expert Alumni

Income reporting in multiple states

In going through the Wisconsin state interview in TurboTax, I initially focused on the screen 'Here's the income that Wisconsin handles differently' and the topic 'Wisconsin Non-Taxable Income', where I made adjustments for the non-taxable interest and dividends as you did on Schedule M, Line 83.

 

However, going past that screen for several more screens, you will come to 'Let us know if you made any non-wage outside of Wisconsin while you were a non-resident' where you can make adjustments for interest and dividends not taxable in Wisconsin.

 

 

@Shadow2020

 

[Edited 2/29/2024 | 8:55 pm]

 

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