NC Form D-400 Residency check boxes

[TO_EA]

I have an NC Form D-400 for an MFJ couple where one spouse lives in CA and one in NC.  I can't seem to get the residency boxes checked correctly for resident spouse.  Both are checked as full year Non-residents. TP is CA full year and Spouse is NC full year resident. Income split looks correct.  Any ideas?

[sjrcpa · Accepted solution]

Pick the best poison. Some states do not realize that married couples may live in different states.

For my peace of mind, I attach a statement splaining the situation.

[TO_EA]

Ok. Thanks.  I think I reached same conclusion.  As long as the numbers are right I suppose I'm OK with it. 

 Thanks for your time!

[sjrcpa]

You're welcome.

[itonewbie]

It is a software limitation.  Lacerte provides only overrides between PY and NR but not FY resident.

The only compromise available, which is not aesthetically pleasing but does convey the correct information about residency period, is to use Screen 55.241, North Carolina Part-Year / Nonresident.  Enter 1 for Spouse: 1=part-year resident, 2=nonresident[O].  Under Dates of Residency - Spouse, enter 01/01/2019 to 12/31/2019 as the residency period.  This will cause the PY box on D-400 Sch PN to be checked and for the correct residency period to be shown.

As for whether the "Income split looks correct", that will depend on whether one both spouses are domicile in CA (or another community property state) because community income laws will apply to income of the spouse whose domicile is in a community property state.

If community property laws apply, I would definitely include a statement showing the allocation.