Mutli-State Return (California Non-Resident)

[vrenaut74]

A Client received two separate W-2s from the same company. Each W-2 had difference federal amounts in Box 1 and States in Box 2. The two states were California and Massachusetts.

I believe I entered everything in correctly, however when I corrected the return from a Partial-Year Resident of both California and Massachusetts, to a Non-Resident of California and Full time Resident of Massachusetts, the California tax stayed the same but Massachusetts increased by quite a bit.

I would think that the overall tax liability of the client wouldn't change depending on resident status, just the amounts allocated to each state.

Can you tell me the correct way to enter Non-Resident CA data, including the ST.PY/NR Tab because I feel like I'm missing something.

Thank you 

[Jack4]

Hi, Vrenaut74. It sounds like when you changed it to a full year MA resident, the income went up for the state of MA. This is correct since typically the full year state will report the same income as federal. 

If the taxpayer lived in MA the full year, code the W-2 to MA and CA as indicated on the W-2. MA will pull all income since it is the full year. However, CA should only pull the CA W-2 as long as they are indicated a part year or nonresident screen 55.011, CA part year/nonresident info. Also in this screen, you can enter MA for the field Domicile in 2020 (Mandatory). 

The following article may help.

https://proconnect.intuit.com/community/form-w-2/help/allocating-w-2-wages-and-withholdings-for-mult...

[vrenaut74]

Hello Jack,

I've double checked my data entry and everything appears to be correct.

In both the Part-Year and Non-Resident the California taxable income is what is shown on the CA W-2 and not the additional income from other sources.

What's confusing me is why Massachusetts goes tax liability goes up as a Full Year Resident vs Part-Year Resident, with everything else staying the same. Feels like I'm double counting income somewhere or perhaps not getting the full credit for income tax paid to CA? 

[Jack4]

Vrenaut74, can you look to see if you are getting a credit for taxes paid to CA on the MA return? Since the full year state (MA) taxes income from all sources, there will typically be an other state tax credit on that return for taxes paid to CA. If you don't see it, you can use screen 52, Other State Tax Credit for Massachusetts and enter in the CA income and taxes paid so that MA will provide a credit.

Hope that helps! Let us know how it goes.

[vrenaut74]

Taking a closer look at the MA return, it looks like for a Partial Year Resident MA is only counting the MA W-2 income and business income from the 1040, not the total Federal income amount.

It's showing all other income unaccounted for as "Non-Massachusetts Income".

So it looks like filing as a Partial Year Resident in this client's return is somehow skipping out on counting some Federal/Total income?