Stock sale causing large NY Tax

[scottmsu]

Bizarre results when entering capital gain from stock sale (1099B).

Gain of $500.

Fed tax impact of about $90…makes sense.

NY Tax tax impact of over $600 (which is more than the gain of $500)?  How is that possible?

[ThomasM125]

It may have to do with a credit or tax that is dependent on an income threshold amount. For instance, if investment income is one penny over $11,000 on your federal return, you can lose an earned income credit which may be worth hundreds of dollars.

I suggest you look at your state tax summary before and after the entry and see what changes. While working on your state tax return in TurboTax do the following:

1. Choose Tax Tools from your left menu bar in TurboTax Online
2. Choose Tools
3. Choose View Tax Summary

See what changes and then investigate further, pay close attention to tax credits and special taxes.

[scottmsu]

This appears to be correct after all, so nevermind. The NY Tax tables have some non-linear jumps when your AGI crosses certain boundaries. And that appears to be what is happening here.