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bi2nh
Level 1

Really need your helps to clarify part-time resident and how Turbo tax handle it

I have been using Turbo Tax for 10 years now. This year I am a bit confused how Turbo Tax can handle my situation. I really appreciate if you could help reviewing my situation and let me know what I should do and whether Turbo Tax can handle it.

So my timeline:

 

01/01/2022 - 03/01/2022: I am still a California resident

 

03/01/2022 - now: I moved to Texas and became an Texas resident (bought a house in Texas and already sold the home in California before the move). Applied for Texas driver license and registered my car with Texas

 

01/01/2022 - 06/01/2022: Still work with the same company in California due to remote policy. Company did apply for a Texas tax id when I notified them of the move and switch my tax profile to Texas in 04/01/2022 so I no longer have any of my tax withhold by California since 04/01/2022. Technically I should be moved to the Texas tax profile since 3/1/2022 but employer needs some time to set up new tax profile in the new state.

 

06/01/2022 - now: Got a new remote job. Employee is based from Tennessee. They also set my tax account to be based from Texas so I don't have any connection to Tennessee.

 

I work remotely from Texas since 03/01/2022 till now

 

So my question would be :

  1. Is TurboTax smart enough to pro-rate my last job so I only pay tax to California for the time I worked in California (1/1 - 3/1) and don't own any tax to California from 3/1 onward ? 
  2. Also how does Turbo Tax handle the 2nd W2 from my new job ? My new job has zero attachment to California. Can Turbotax exclude that W2 from California ? Is there an option to tell Turbo Tax that that W2 has nothing to do with California ?

Thank you so much for your helps. I really want to use Turbo Tax if possible so appreciate if you could help me find a clear path forward !

2 Best answer

Accepted Solutions
tagteam
Level 15

Really need your helps to clarify part-time resident and how Turbo tax handle it

Texas does not impose an individual income tax, so you only need to be concerned with a part-year return state return for California, which TurboTax can handle.

View solution in original post

Hal_Al
Level 15

Really need your helps to clarify part-time resident and how Turbo tax handle it

Q. When I enter W2 for the new job, will there be an option in Turbo Tax to exclude that W2 from California.

A.  Not exactly. When TT does not see "CA" in box 15 of the W-2, it will not treat the box 1 amount as CA income (in your  situation, TX & TN), boxes 15-20 of the W-2 should be blank.  Later, in the CA interview, you will be asked to allocate income as CA or not CA.

 

Q. How does Turbo Tax pro-rate the 1st W2 when the state resident switch is taking place ?

A. By the state abbreviation(s) in box 15 of the W-2 and the amount in box 16 on each line. Ideally your employer shows CA for only the Jan 1 -Mar 31 amount.  Otherwise, you may have to make adjustments when you enter the W-2 or at the income allocation screens.

 

Reference: https://turbotax.intuit.com/tax-tips/state-taxes/multiple-states-figuring-whats-owed-when-you-live-a...

View solution in original post

5 Replies
tagteam
Level 15

Really need your helps to clarify part-time resident and how Turbo tax handle it

Texas does not impose an individual income tax, so you only need to be concerned with a part-year return state return for California, which TurboTax can handle.

Hal_Al
Level 15

Really need your helps to clarify part-time resident and how Turbo tax handle it

Q. Is TurboTax (TT) smart enough to pro-rate my last job so I only pay tax to California for the time I worked in California (1/1 - 3/1) and don't own any tax to California from 3/1 onward ?  Is there an option to tell Turbo Tax that that the TN W2 has nothing to do with California ?

A. Yes.  But, you have to follow the TurboTax interview carefully. 

 

One possible problem is your 1st employer misidentifying some income (e.g. Apr 1-30) on your W-2 as CA income. But, there is a work around in TT. Don't worry about it now.  You can get help in this forum, next tax season. 

bi2nh
Level 1

Really need your helps to clarify part-time resident and how Turbo tax handle it

Thank you for responding. My question is when I enter W2 for the new job, will there be an option in Turbo Tax to exclude that W2 from California since it has nothing to do with California. The employer is not in California and at the time of taking the job I already became a Texas resident.

 

Also how does Turbo Tax pro-rate the 1st W2 when the state resident switch is taking place ?

 

Thank you !

Hal_Al
Level 15

Really need your helps to clarify part-time resident and how Turbo tax handle it

Q. When I enter W2 for the new job, will there be an option in Turbo Tax to exclude that W2 from California.

A.  Not exactly. When TT does not see "CA" in box 15 of the W-2, it will not treat the box 1 amount as CA income (in your  situation, TX & TN), boxes 15-20 of the W-2 should be blank.  Later, in the CA interview, you will be asked to allocate income as CA or not CA.

 

Q. How does Turbo Tax pro-rate the 1st W2 when the state resident switch is taking place ?

A. By the state abbreviation(s) in box 15 of the W-2 and the amount in box 16 on each line. Ideally your employer shows CA for only the Jan 1 -Mar 31 amount.  Otherwise, you may have to make adjustments when you enter the W-2 or at the income allocation screens.

 

Reference: https://turbotax.intuit.com/tax-tips/state-taxes/multiple-states-figuring-whats-owed-when-you-live-a...

bi2nh
Level 1

Really need your helps to clarify part-time resident and how Turbo tax handle it

Thank you so much for the detailed response. Looks like I found a clear path forward based on your answer. Will take extra caution when filling out this year but looks like my questions have been answered.

 

I really appreciate your helps ! Looking forward to using TurboTax again this year !

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