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I moved to Washington DC from New York City about 2/3 of the way through 2020, but unfortunately my employer chose not to change my address for taxation purposes and continued to pay me as if I lived in New York state (although I did manage to get them to stop withholding for New York City income tax after about a month).
I am almost finished filing with TurboTax Premier, however when I am filling out the information for my DC tax return, it asks me the amount of income that was double taxed by DC and New York. The answer for me is of course $0, since my employer never adjusted my taxes to pay any amount to DC. Because I lived in DC for 129 days of the year after my move, I believe I should've been paying DC some of my income tax?
I believe I owe 35.3% of my income tax to DC (129 days / 365 days = .3534), how do I fill out this screen correctly to get TurboTax to update how much I owe to DC?
Is this even possible to adjust correctly within TurboTax or do I need to hire a CPA? Also was thinking I may be able to use TurobTax Live, however, if the software is not capable of handling this situation, then I don't think a specialist can fix this for me either?
Thank you!
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You are correct, there will not be any double taxed income. You will file a Part-year (PY) resident NY and PY resident DC returns. You will allocate the income to the proper state based on your resident time in each state. You will end up with a refund from NY since they over taxed you, but you will owe DC since they did not withhold any taxes in 2020.
In the NY state interview after the residency questions you will arrive at a page titled ""Date of last move". You will enter when you left NY and then select an appropriate answer to the status on 31 Dec. I assume it will be "did not live in NY and no NY income while a non-resident." That will open the interview questions to allow an allocation to NY only. You will also go through the interview section to allocate deductions to NY.
Next in the DC interview, you will arrive at a page titled "Subtractions from federal income part year." There you will enter the income earned while resident of NY. Eventually you will also go through an interview section where you will allocate the deductions to DC as required based on your residency time there.
You are correct, there will not be any double taxed income. You will file a Part-year (PY) resident NY and PY resident DC returns. You will allocate the income to the proper state based on your resident time in each state. You will end up with a refund from NY since they over taxed you, but you will owe DC since they did not withhold any taxes in 2020.
In the NY state interview after the residency questions you will arrive at a page titled ""Date of last move". You will enter when you left NY and then select an appropriate answer to the status on 31 Dec. I assume it will be "did not live in NY and no NY income while a non-resident." That will open the interview questions to allow an allocation to NY only. You will also go through the interview section to allocate deductions to NY.
Next in the DC interview, you will arrive at a page titled "Subtractions from federal income part year." There you will enter the income earned while resident of NY. Eventually you will also go through an interview section where you will allocate the deductions to DC as required based on your residency time there.
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