Part year residency MN/VA tax income calculation discrepancy

[KID92]

Hello,

I was a part year resident of MN from Jan 1 to June 30. I became a resident of VA since July 1st. When I try to calculate my state taxes, turbo tax chooses part year residency status for MN appropriately. In the next screen it asks me to choose the amount of income that should be allocated to MN. I choose 46,059 which was earned when I was working in MN.

Then the next screen goes to taxes and credit summary in which it keeps saying that my MN taxable income is 164960 and my part year income tax for MN is 2787. I don't know why turbotax keeps pulling my entire federal income minus deductions as my taxable income. Screenshot below.

Then the next screen shows the MN tax summary which is completely wrong. It keeps saying my MN taxable income is 164960 despite only earning 46059 when I was in the state. See screenshot below.

How do I fix this? I do not know what I'm doing wrong. Thank you for your help.

[baldietax · Accepted solution]

I've been a thru part-year state moves a few times including VA using TT, generally you provide the income attributable to each state, which you did....a few thoughts:

- the tax looks in the right ballpark tho 2787 / 46k = 6% ? (tho 46k may get deductions so may not be the final result)

- I suspect/guess that TT is showing you this Federal AGI adjusted for MN because it has to deal with any state level deduction etc which will be a pro-rata based on your income attributable to MN vs. total.  So there still some math around your total AGI to do from MN perspective as tho you were a full year resident, which may be why TT is showing you these figures.

- best thing for this type of situation is to dig into the forms TT is generating if you can see those (online in print center you should be able to download a copy of your PDF? - and you may need the copy with 'all forms and worksheets') there should be a 'part year' form that will show how it is getting from your total AGI thru deductions to the tax more clearly.  Same thing for VA side it will be Form 760PY, and TT should have a "standard deduction worksheet" where it does the pro rata on how much deduction to apply to the income you claimed as VA.

Hope that helps.  Not a CPA or expert in online TT or MN taxes, so just my 2 cents what to look for.

[baldietax]

P.S. welcome to Virginia

[KID92]

You are right! When I used the print center preview, MN calculated the part year income correctly! It's just the way turbotax online generates the income and taxation which is confusing! Thank you.