Part year resident in 2 states, Turbotax does not allow apportionment of U.S. Obligations between 2 states

Forum|Forum|4 years ago
March 10, 2022
2 replies
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I entered the amount of U.S. Obligations into the Federal TurboTax Deluxe. TurboTax then automatically populates the entire U.S. Obligations amount into both states (I am a part-year resident in both states). I should be allowed to apportion the appropriate portion of the U.S. Obligations to each state, but TurboTax does not query for or allow apportionment of U.S. Obligations. Instead it automatically enters the entire amount into both states. I think this is a bug that needs to be fixed.

JohnW152

What states are you working with?

States compute income tax differently.

Some start with the entire federal income amount and proceed with additions, subtractions and/or credits that are unique to that state.

Other states start from scratch, then add income, deductions and credits from there.

How TurboTax is computing your state returns depends on which states you’re filing returns for.

BiBi3Author

The entire U.S. Obligations amount is subtracted from each state's income regardless of whether the state starts from scratch or starts with entire federal income. The point is that the U.S. Obligations are calculated (by the user) from dividends, and the dividends are apportioned between the two states, based on state of residence when dividend is received. Therefore the U.S. Obligations associated with the apportioned dividends should be likewise apportioned, and TurboTax does not query for this, or calculate it, or even allow the U.S. Obligations amounts to be changed in the forms view. Please inform me how to apportion the U.S. Obligations amount in each state, or fix the bug. Thank you.

MAK70

Can you clarify which states? As part of the investigation process, we have to submit a specific example. @BiBi3

Pip_12_mn

I realize this is an old thread but this exact problem still existed in 2023 tax return for the state of MA (inability to make adjustments for part year resident US interest obligations). I would simply like to document for anybody else struggling with this issue that not only did I post this problem in 2023, but I consulted by phone with "Turbo Tax Experts" who acknowledged the TT bug, but it still has not been resolved. I ended up having to get a refund from TT for the tax program and I filed with an alternate tax software which handled it perfectly.

TT obviously has a problem dealing with part year resident State returns as it relates to US Treasury Obligations. TT if you are listening please fix this once and for all for all states.

where-is-the-ma-state-part-year-question-to-make-adjustments-for-interest-from-us-obligations/01/3272306#M1203422