state withholding taxes

[townerdon]

I had income tax withholdings from a 1099-R for a state I didn't work or live in during the year.  How to I file for a refund in that state without having to report the income from the 1099-R

[BillM223]

There are two general ways in which this is done. 

First, if you file a non-resident return for that state, the interview may ask you to enter whatever income is that state's source income. If you were living in another state when you received this distribution, then you would not show this income as belonging to that state.

Second, other states do it differently. They start with the federal income (which will include the 1099-R, tax is calculated on this income on your nonresident state, and then that state tax becomes a credit on your resident state tax. The result is that you pay tax on that income only once, even if it is not your resident state.

Since we don't know which states you are talking about, we can't give you a more precise description. But for almost all states, it will be one way or the other.

[townerdon]

thank you for the response - appreciate the information.  the tax was withheld in CA but the person moved to AZ at the end of 2019 but didn't change their withholdings.  So the retirement income should be reported for AZ, and not CA.  A "part year" return was filed for AZ in 2019.

[DawnC]

Make sure you notify the payer of the 1099-R of the 2019 move so you do not have to file another non-resident return next year.  File a non-resident return for CA  and allocate zero income to CA and all of your income to AZ.   The first thing you want to do (after notifying the payer to switch withholding to AZ) is to make sure you've filled out the Personal Info section correctly:

1. With your return open, select My Info in the left-hand menu.
2. Then, on the Personal info summary screen, scroll down to Other State Income, and select Edit.
3. At the Did you make money in any other states? question, answer Yes, and make sure your nonresident state(s) are selected from the drop-down.
4. Select Continue to return to your Personal info summary.

After you finish your federal return, you'll automatically move to the State tab, where you'll see your nonresident state(s) listed in addition to your resident state.   Also:

• Select the long-form (if the option is available) even if TurboTax defaults to the short form.
• Only report the income attributable to the nonresident state.
• If preparing a nonresident return solely to recover erroneous tax withholdings, enter 0 on the screen that asks for the amount of income earned in that state. This will eliminate your tax liability for that state, resulting in a full refund.