K-1 for Interest Income (Non-Taxable) from Non-Resident State

Forum|Forum|3 years ago
February 28, 2023
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I received a K-1 from Maryland for non-taxable interest income from my mother's estate. I live in North Carolina. I am preparing my North Carolina income tax return and Turbo Tax (State of NC) is asking me to fill in information about my North Carolina K-1. My K-1 is from Maryland.

Do I have to download Maryland in Turbo Tax to report the Maryland K-1 information, even though the interest income is not taxable? I have no other Maryland income. Will that flow over to North Carolina so that I do not have to enter K-1 information on my North Carolina return?

Best answer by MonikaK1

If you don't have any Maryland-sourced taxable income and you lived in North Carolina all year, then you don't need to file a Maryland state tax return. As a North Carolina resident, all of your income is subject to taxation by North Carolina unless it is excluded from taxation.

To enter a Schedule K-1 which you have received, in TurboTax Online:

Click on the Federal, on the left, in the black toolbar.
Select Wages and Income or(Income and Expenses), at the top tab.
Scroll down and click on Show More for S-corps, Partnerships, and Trusts.
Click on Start or Revisit for Schedule K-1.

In your North Carolina state return, answer all of the interview questions and TurboTax will determine which items, if any, of income you reported on your Federal return need to be adjusted for North Carolina.