Does turbotax allow multiple returns for the same state from the same person for the same tax year?

[morpate]

I lived in Maryland for part of the year, then became a resident of another state (California) but still had Maryland source income while not a resident. In this circumstance Maryland requires me to file two returns, once as a part year resident for the period I lived there, and once as non resident to cover the rest of the year. 

Page 1 of the MD non-resident booklet indicate the need to file two returns. (http://forms.marylandtaxes.gov/current_forms/nonresident_booklet.pdf) Per the table on page 1, because I am a "Taxpayer who moved into or out of Maryland during the tax year and received income from Maryland sources while [I was] a nonresident of Maryland, the booklet indicates I should file "Form 505 Nonresident Return and Form 502 Resident Return"

Does turbotax allow multiple returns from the same state for the same person? How do I handle this circumstance in turbotax?

[SteamTrain]

...I think you re mistaken.

The nonresident MD forms are also used for part-year residents and handles income both while you were a (ptyr)resident of MD, and during the time you were a non-resident.

It all is handled during the MD partyr/nonresident interview (whenever TTX finally has those forms)

<a rel="nofollow" target="_blank" href="http://forms.marylandtaxes.gov/16_forms/nonresident_booklet.pdf">http://forms.marylandtaxes.gov/16_f...>

[morpate]

See the last row of the box under instruction 1 on page one of the booklet you linked. I am a "Taxpayer who moved into or out of Maryland during the tax year and received income from Maryland sources while [I was] a nonresident of Maryland", and therefore, should file "Form 505 Nonresident Return and Form 502 Resident Return"

[SteamTrain]

Interesting....Not sure  (which is why I put this all in as a comment in the first place).

There have been thousands and thousands of former MD residents in your situation....never been an issue taht I've seen, so I suspect that TTX uses whatever forms are necessary .

............maybe someone who actually has the 2016 software forms and can test that situation (since 2017 isn't out yet) will be able to educate us all.
.

[SteamTrain]

@dmertz

Don't you do MD?

[dmertz · Accepted solution]

Yes, it appears that you are required to file both a part-year resident Form 502 and a non-resident Form 505.

I'm not aware of a way to file two state returns for the same state within a single TurboTax tax file.  Absent a way to do this, I would use the CD/download version of TurboTax, prepare the federal tax return, save two copies of the tax return file at this stage, then prepare the part-year resident Maryland tax return using one copy and prepare the part-year resident California and nonresident Maryland tax returns using the other copy.  You'll need to check carefully to see that credit for taxes paid to another state are correctly handled on each of the state tax returns.

(It actually may not matter which file is used to prepare the California tax return, or you could prepare the California tax return before making the copies in which you'll prepare the Maryland tax returns.)

[dmertz]

Also, I think you can e-file all of the returns.  Obviously you'll e-file the federal tax return from only one of these files.

[dmertz]

For 2018, you'll only be able to transfer in from one of these tax files, so you'll probably have to adjust the amount of state taxes paid or state refunds received in 2018 to incorporate this info from the other file.

[SteamTrain]

Still, I would think that the TTX software would always include both forms (whenever both are required) for someone in this situation.  It's not that unusual...a person moves out of MD mid-year, but still has a rental home, or Farm, or other business presence operating in MD.
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I was hoping that it was like NC, that uses the main resident form for all situations, but, when necessary then uses a special PY/NR schedule to bring in the actual final NC-taxable amount midway down the form.  I haven't seen that the MD forms do that (yet)

[morpate]

After some thought, I wonder if perhaps TTX considers this situation one return with two forms (505 and 502), and will fill and file both as part of a single return. (Similar to SteamTrain's comment)

[dmertz]

In the Maryland module, a radio button allows you to select one of Full-year resident (Form 502), Part-year resident (Form 502), or nonresident (Form 505).  For a part-year resident return, I only see a way to enter non-Maryland income, not Maryland income while not a resident.  I see no way to get TurboTax to prepare both Form 502 and Form 505 in the same tax file.

[dmertz]

If you use the multiple tax-file method, you'll probably have to allocate all of the Maryland tax withholding and estimated tax payments to the tax file used to file your federal tax return.  That will probably mean zeroing the Maryland tax withholding in the other file so that you aren't credited for the same withholding on both the Form 502 and the Form 505.  Forms 502 and 505 both require you to attach (included electronically when e-filing) Forms W-2 and 1099 that show tax withholding that you claim on the particular form.

[morpate]

Maryland allows online direct filing of form 502, so my plan is to use TurboTax Online to file Federal, California, and MD form 505, and then separately file 502 electronically via the Maryland portal. I'll have to fill both 505 and 502 first prior to filing California in order to compute the tax credit in CA earned for MD taxes paid. One concern is that I believe CA requires filing a copy of the other state tax return when claiming the credit, and I will have no way to electronically attach both forms 505 and 502 to my CA return.

[morpate]

Upon further investigation, I am incorrect -- CA does not require filing a copy of other state returns when e-filing. I merely have to keep a physical copy for record keeping.

[morpate]

Also, for anyone else who comes upon this question, the instructions for form 505 state that witholdings and estimated payments must be allocated between the two returns. Presumably, that means allocating proportionately by the relative percent of total MD income on each return.