Question

Moved to new state--after earning entire income in that state--and 0$ previous state refund/payment?

Forum|Forum|4 years ago
March 11, 2022
1 reply
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Just filed my 2021 return. I moved from Oklahoma to Texas midway through 2021 and indicated this during filing with TurboTax. The weird thing, I suppose, is that I worked remotely for a company in Texas before actually moving to Texas, so my entire year's income took place in Texas, even for the months I was still residing in Oklahoma.

Now, after reading posts from others who weren't able to e-file due to underpayment, I'm concerned something's gone wrong. The Oklahoma return listed my entire year's income (not just the portion when I actually lived in Oklahoma). I wasn't given the option to split the income anywhere in the return, despite inputting the date of my move and going back through the return three or four times.

There was no refund nor payment to Oklahoma listed in the return. Can this be accurate? I know I didn't earn anything from Oklahoma sources, but will they come after me for back taxes later? Will there be some crazy underpayment penalty?

B

BillM223

The Oklahoma Instructions for form 511-NR state:

"HOW NONRESIDENTS AND PART-YEAR RESIDENTS ARE TAXED

The Oklahoma taxable income of a part-year individual or nonresident individual shall be calculated as if all income were earned in Oklahoma, using Form 511-NR. The Federal Adjusted Gross Income (AGI) will be adjusted using the Oklahoma adjustments, allowed in 68 Oklahoma Statutes (OS) Section 2358, to arrive at AGI from all sources. The AGI from all sources is used to determine the taxable income. After the taxable income is calculated, it is prorated using a percentage of the AGI from Oklahoma sources divided by the AGI from all sources. This prorated tax is the Oklahoma tax."

It appears that TurboTax relies on the state income fields on your W-2 (boxes 15 through 17) to know how much income to assign to Oklahoma. In your case, I suspect that you had no tax withheld for Oklahoma, so the ratio of OK income to federal income was zero, so the amount of OK income on your return is zero.

However, the Oklahoma Instructions state (on page 5 of the above link):

"The Oklahoma source income of a part-year resident is the sum of the following: (1) All income reported on your federal return for the period you are a resident of Oklahoma, except income from real and tangible personal property located in another state, income from business activities in another state, or the gains/losses from the sales or exchange of real property in another state; and (2) The Oklahoma source income for the period you were a nonresident of Oklahoma."

You earned half of your income (or whatever amount) while still a resident in Oklahoma. Therefore, to do this right, you need enter the amount of your wages (were you an employee of that Texas company?) in box 16 on your W-2, and OK in box 15 (you may have to make up a number for the rest of box 15 - since no money was actually withheld in box 17, the number won't matter).

Now go through your Oklahoma return again, and see what happens. And if you were a contractor and not an employee come back and tell us.

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S

swaminandaAuthor

Thank you!

I tried to go back in and amend my tax returns, but the problem became that TurboTax removed my entire Federal return and started asking how I wanted to pay the $800+ debt to Oklahoma. With the original federal return, I only ended up owing like ten dollars. I couldn't get the Federal return back to where it was, so I don't know how to proceed. Is there a way to simply cancel this filing and start over?

Oklahoma already accepted the original return (according to TurboTax), but will the Oklahoma processors reject it after reviewing it? What's the potential outcome here?

M

MAK70

The first thing to do is sign into TurboTax and go directly to the Oklahoma state return. You should have already indicated that you need to amend your state tax only. Check your resident status and make sure you are filing a Part Year Resident Return. You will then get Allocation screens (see below) where you can indicate zero Oklahoma income. @swaminanda