Help! NC and SC income

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Client lived in SC for years and worked in NC for years. In July the client sold his house in SC, had taxable gain and moved to NC. So from July - December, he is a part-year resident in NC where he is employed. All withholding is in NC. Am I correct that all the earned income is fully taxable in NC, but only the prorated amount of income is taxable in SC because he moved out of SC? Also, is it correct that the gain on the sale of the house is only taxable in SC because he lived in SC at the time of the sale and it was located in SC? Any advice on this would be so appreciated; I don't know who to turn to for advice.

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dkhAnswer

Level 15

You'd file a part-year resident NC and part-year resident SC. Allocate income according to what was earned while living in each respective state including the sale of the house. Bottom of Federal Information Worksheet has the allocation worksheets.

NC / SC are reciprocal states (correct?). So the SC residency working in NC has reciprocity.

dkhAnswer

Level 15

You'd file a part-year resident NC and part-year resident SC. Allocate income according to what was earned while living in each respective state including the sale of the house. Bottom of Federal Information Worksheet has the allocation worksheets.

NC / SC are reciprocal states (correct?). So the SC residency working in NC has reciprocity.

T

tammieAuthor

Level 4

Thank you for the clarification

dkh

Level 15

You're welcome.

Our job would be easier if clients would only move on Jan 1st.......lol

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