How to allocate 1098-T excess income to particular state

Forum|Forum|5 years ago
April 12, 2021
1 reply
0 views

Hi-- My 2020 tax year 1098-T has Box 5 > Box 1, so I appear to have excess income that is subject to federal tax.

In 2020, I graduated from my college that was in Washington, DC and moved my official residence from Ohio to New York.

Currently, Turbotax is taxing all of my income as New York.I don't think my 1098-T excess income should be taxed in New York because I lived in Ohio at the time I received the scholarship and moved from Ohio to New York only later in 2020.

Even though I have started the process for an Ohio tax return as well, there is no place for me to enter that part of my income (amount of Box 5 minus Box 1) should be taxed in Ohio.

How should I proceed in Turbotax? Thanks!

TurboTax Premier Online

Hal_Al

Employee

Ohio does a convoluted tax calculation for non-residents/part year residents. It calculates tax on total income, then it calculates a non resident/part year resident credit, which it subtracts from the tax it calculated on the total income. The credit is calculated as your non-Ohio income divided by Total adjusted Income multiplied by the total tax. TurboTax (TT) does this by allocating your income as either Ohio or non-Ohio. W-2 income will be allocated by the state name abbreviation shown in box 15 of your W-2. TT will ask you, item by item, in the state section, how much of your other income is Ohio or non-Ohio income. Make sure that your non-Ohio wages show NY (Other state postal abbreviation) in box 15 of your W-2 screen, with the NY amount in box 16.

I suspect the NY software has similar screens.