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Should my resident state tax increase when I have over $17k in losses in another state?

Forum|Forum|6 years ago
March 29, 2020
2 replies
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When I enter the out-of-state income (which is a third of the total losses), my resident taxes decrease.

Then, when I enter my out-of-state losses (which are triple the income), my resident taxes increase.

This seems backwards to me and is growing very frustrating, any help is appreciated.

TurboTax Premier Online

Best answer by Hal_Al

Ignore FL.

When asked in the personal info section if you earned income in another state, answer no. The purpose of that question is to see if you need to file another state return. You don't since you have no assets.

I'm not familiar with OK software. But, a question about out-of-state income should not come up (in other state software) if you answer no, back in the personal info section, about income in other states.

Since you have a loss, on the rental property, an increase in OK refund is normal. You do not exclude the FL income/loss from your OK return.

DavidS127

More information may help diagnose your issue. For example, what are the resident and nonresident states, what activity generated the losses, and when you say "taxes decrease" do you mean the total tax, the payment due, or the refund?

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A

asp1981Author

Thank you and I am happy to provide more info:

Resident state is Oklahoma.
Nonresident state with rental property is Florida.

The property does not have assets, so I will not be completing a return for Florida (there is no state income tax in FL) and therefore will not have FL tax to deduct from the OK tax.

When entering the out-of-state income in OK, I have to choose "other state" because FL is not on the list.

I am baffled when I do enter the out-of-state income that my OK state refund INCREASES (I get more back). Then, when I enter losses on the following page that are three times the income, I then owe OK more taxes. This seems backwards.

Hal_AlAnswer

Employee

Ignore FL.

When asked in the personal info section if you earned income in another state, answer no. The purpose of that question is to see if you need to file another state return. You don't since you have no assets.

I'm not familiar with OK software. But, a question about out-of-state income should not come up (in other state software) if you answer no, back in the personal info section, about income in other states.

Since you have a loss, on the rental property, an increase in OK refund is normal. You do not exclude the FL income/loss from your OK return.

Hal_Al

Employee

The way it works in most states, your report all your income and losses on your residence state return, regardless of where earned.

You then claim credit for any tax paid to a non-resident state. If you had no tax in the non-resident state, because of losses, there will be no credit. But, your get to reduce your taxable income, in the resident state, by the losses in the other state.

But for a definitive answer, we need to know what the states are.