Allocating money across different states

[tgfathergoose]

I am trying to do my taxes for this year, and I am not sure how to allocate money. We are retired, live in Virginia, so all of our retirement, Social Security, withdrawals from retirement accounts, and interest from bank accounts get credited to Virginia. As they should be. However, this year I received a K-1 estate final distribution for the state of Nebraska. I entered all the K-1 information on the federal side, and added the K-1N for Nebraska on the state form. What I'm concerned with is that I entered the K-1 on the federal side, but I didn't see anywhere to mark that that should go to Nebraska and not Virginia. I pulled up my Virginia form, and the K-1 information is there, to include the interest on the trust, so I think I'm being taxed by Virginia for this, too. I don't think it should be, since this is for Nebraska. What am I doing wrong?

[CatinaT1]

No. You are not doing anything wrong, and Virginia is correctly calculating tax on this income. This income is sourced to the resident state of the beneficiary (Virginia), rather than the state where the estate is established, Nebraska.