I have a client who moved from NC to VA; neither State return is picking up the income as taxable Dates of residence have been entered in each Part-Yr/Nonres. screen?

[sjrcpa]

You have to assign each income item to each state or states.

[itonewbie]

As Susan says, you need to input the amounts taxable by the respective states.  PTO wouldn't otherwise know how much income your client had from each source while resident in each of the states.  Just like you wouldn't know unless your client tells you, so, now, you need to tell PTO what to do.

Check out these articles for instructions on how to prepare multi-state returns in PTO.  The second article is a bit dated but it is still a good reference.

https://proconnect.intuit.com/community/help-articles/help/how-to-create-a-multi-state-return/00/471...

https://proconnect.intuit.com/taxprocenter/practice-management/handling-multi-state-returns-in-proco...

[AnneL]

Thank you both for your replies.
I'm not sure the coding of the income is the issue.
The income was actually earned in NY.
It is only taxable in NC and VA as resident states.
As a full year resident of NC in previous years, the income was recognized and taxed and the credit for taxes paid to NY was calculated.

I also recently prepared a return for someone who moved from NY to SC and the income was allocated appropriately based on dates of residence, but the SC input/residency questions were different in the program than they are for NC and VA.

[itonewbie]

If you are clear about the residency and residency period, coding is always the issue.

Given the additional information you shared, one big question that hangs over this is whether your client was telecommuting with a NY employer.  If so, this could create double tax exposure in some states.

[sjrcpa]

If income was earned in NY, NY will want tax and a NY nonresident return.

How did you get a credit on the NC return without filing a NY return?

[AnneL]

The NY Non-Res was filed and taxes paid and that's how the credit to NC was generated.

[itonewbie]

But you haven't confirmed whether your client was telecommuting for a NY employer...

[AnneL]

I'm not sure that has any implication here.
The Pro-connect program recognized the Non-Resident NY income as taxable on the NC Resident return last year; but not on the Part-year Resident return this year.
Taxability has already been established.
I'm just trying to get the program to calculate what has already been established that it should.

[itonewbie]

But it does.  It makes a difference as to whether the returns are correctly prepared.

Both NC and VA allows credit for taxes paid to other states only on income from sources without their own states.  If your client telecommunicated from NC and VA not for the convenience of the NY employer, the wages will still be sourced to the home state where services were performed, which means taxes paid to NY would generally not qualify for a credit (in spite of NY considering the same to be NY-sourced).

This is a well-documented conundrum that has been tried in courts and which should be avoided.

[AnneL]

Helpful information.
Still looking for how to get the income recognized though.
An hour on the phone with Intuit and no resolution....

[itonewbie]

Have you read through the articles?  You just need to follow the instructions.  If you run into roadblock, let us know what it is and we may be able to help.

[AnneL]

I did look at the articles, thank you.
I'm very familiar with multiple state returns and with the program.
I don't believe this is an input error.
I believe it is a glitch within the program.
The program is treating partial resident income differently than it did full year income simply because the person was a part-year resident.
It should be a simple allocation, but the dates of residency don't appear to be generating the allocation.

[itonewbie]

For part-year resident returns, income and expenses often need to be coded with three lines.  One for the full amount to be coded US-N for federal, another amount for PY-NC coded NC-S, and the remainder for PY-VA to be coded VA-S.  Is that how you made your entries?

[AnneL]

No, it's not.
Where in the program would I make those designations?
Are you saying I need to calculate the allocation manually and add the lines to the W-2 as well as to each income and expense item?

[itonewbie]

If you had read the articles, these are explained in details.

Yes, you will need to allocate the income and expenses, then make those entries in PTO.  It's the same with your clients - if your clients don't let you know how much they have earned or paid during which period, how would you know?  By the same token, if you don't do those allocations in PTO, the system also wouldn't know how much to report or deduct in the respect states.

The allocation is just simple math for income ratably earned during the year, such as interest income.  Income such as dividends and capital gain would take a bit more work.  W-2 should be simple enough since state wages are reported.

In each of the input fields for amounts, click on the + sign for the popup.  You'd make the corresponding entries as explained in that popup.  Don't worry about the total (which would double the federal amount) as it won't affect anything on the returns.

[AnneL]

As I said, I did read the articles.
And I understand the allocation and the input process.
My point was that with regard to the income in this return, the allocation is purely based on residency and that in other instances the program has made that allocation.
There's no information the program doesn't have already in order to generate this allocation so it seems odd to me that the program would not generate it.
Additional input seems redundant, but I will give it a try.
Thank you for your help.

[itonewbie]

Give that a try.  These are not redundant entries, just how Lacerte/PTO works.