We are in Iowa and have been doing a return for Texas residents and have never gotten REP for a Texas return because they don't need to file one. However, the husband is now an Iowa resident. I've tried setting it up for him in Iowa and her in Texas. The IA126 form for part-year/nonresidents has all of her income on it because without Texas REP I can't allocate her income to another state.
When I ask for REP it says to only do it if you have franchise tax to file. I appreciate that they do that and save people money, but can I ignore that and pay for REP anyway, and be able to mark items of income as Texas?
I understand that she will be taxed on the income on Iowa anyway because she doesn't have any TX tax to put on the out of state credit and that's fine, but the IA126 says for non-residents to only list Iowa source income on it.
Mark the return MultiState at the very top of the Client Information screen. Code the TX items as US.
Okay, things that are just hers are marked US. But there is a joint investment account showing half and half dividends on the Iowa form. I could just leave it alone, or has anyone divided a 1099-B into two entries?
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