$130k taxable income on $37k actual income

[ColSanders83]

Hi All,

I moved from Arizona to Oklahoma in August of 2024. I'm going through the Oklahoma tax return and under Oklahoma wages TurboTax put in $37,487 under Oklahoma amount (This is the amount from my W-2's that shows as Oklahoma income.) However, when I look at the taxable income for the Oklahoma return it shows $130,105 which indicates that Oklahoma taxes income made while not being a resident of Oklahoma. As a result it shows I owe $151 to Oklahoma. This can't be accurate, can it?

TurboTax Deluxe Fed & State edition

[ColSanders83]

I didn't know this, but you can view the the actual tax forms TurboTax is using behind the scenes before you have finished entering data. I reviewed the form and Oklahoma does use all income, even income from before becoming a resident, to calculate Oklahoma taxable income.

[SteamTrain]

Yeah...part year tax forms can be a gian mess and hard to figure out.

BUT...if you can see a copy of the actual Form 511-NR.

Check lines 17, 18, 19 of that form

if line 18 is a number less than 100%  (somewhre around 30%) then they are likely calculating it correctly

i.e. the line 17 $$ is the tax based on all your year's income...then the tax is reduced to the line 19 $$ based on what % was earned in OK.

(I'm not sure if they are using an actual % on line 18, or the decimal fraction used as a multiplier).

[ColSanders83]

The $151 owed didn't seem that off base, but owing for income while not a resident seemed very off. They do divide the actual OK income by the Fed income and get ~25% and use that in the final calculation. Just seems really weird to do it that way to me. I guess that means I can technically report the AZ income as taxed by OK on my AZ tax return, but that results in only a few extra dollars and not worth the hassle if AZ bock's at it.

[SteamTrain]

Most states do it in a similar way for part-year residents. 

By doing it that way the state lets you apply any personal exemptions and deductions to your entire yearly income first......and the final % reduction in taxes for being a part-year resident, also, kind-of, proportionates those personal exemptions and deductions to the % of time you were a resident.

(Yeah, I don't really know how to state it exactly....handwaving argument for how it's done)