State income Box 16 double reported for ME and CA

[lbatt4]

 I was a California resident for the first 4 months of the year then moved to Maine to become a Maine resident for the remaining 8 months.  The whole year I worked for an office based in Maine. My W-2 shows 2 amounts in Box 16: CA state wages that appear apportioned to my time in CA, but the ME state wages are my entire wages, ie equal to Box 1. Isn't that double-reporting my income, and resulting in double paying state taxes? Why would my entire wages be reported for Maine if I was a resident for only 8 months? Perhaps it is because my workplace was Maine for the whole year, however, the income allocation question in Turbotax says "enter the amount that was earned during the period you were a Maine Resident". This automatically fills with my entire wages. I'm concerned about changing this amount to the amount earned while I was actually a Maine resident, as it would then not match Box 16 in the W-2. Thoughts? 

[BillM223 · Accepted solution]

Many states deal with the double taxation question by allowing residents to take a credit for taxes paid to other states on the same income. For example, you normally do your nonresident state first in TurboTax (CA in this case), and your resident state second (Maine). This allows TurboTax to calculate the nonresident state's tax, so it can be used in another state.

On Schedule A, Maine has "12. Credit for Income Tax Paid to Other Jurisdictions. Enter the amount from line 5 of the worksheet for the Credit for Income Tax Paid to Other Jurisdictions. (Enclose worksheet(s).)" In most states, this is how the credit is is handled.

In essence, you are paying tax to one jurisdiction or another, but you are not being double taxed.

So do CA first, then ME, and see if it doesn't work out this way.

[lbatt4]

Ok thanks, super helpful. Yes, it does appear that Maine credits back CA taxes paid. However, I want to make sure I'm entering it right as it seems clear to be asking for income earned while a Maine resident... should I still just leave that as what's reported in Box 16 for Maine which is my total wages, even though they weren't all earned while I was a Maine resident, or should I manually adjust that? 

[DawnC]

On the screen asking for income earned while a Maine Resident, only enter the income you earned while you were a resident.   See this linked article for help with allocating your income.