Question

State Taxes

Forum|Forum|6 years ago
March 15, 2020
1 reply
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I moved in 2018 and have submitted my new address to my old employer many times and they refuse to correct in the system. Received a W2 for 2019 from a rollover bonus I received and my old address is still on there and since it is a W2, state taxes were taken out for Colorado but not for Maryland, where I currently live and have lived for almost two years now. There is a question on the Maryland state taxes in the credit section asking to "Enter the income taxed by both Maryland and Colorado, and the taxes you paid to Colorado." I don't think Maryland taxed the income though. It was just taxed federally and by CO. Do I need to submit a Colorado return even though I'm not a Colorado resident since taxes were taken out in that state? Or can I enter the amount taken out for Colorado taxes on my Maryland state taxes as a credit -- it's not double taxed though?

Not A Product Question

J

JotikaT2

You will need to file a nonresident Colorado return as well as a resident Maryland return.

Since the withholdings were made in Colorado, these amount have been reported to Colorado and if you do not file your return there, the Colorado Department of Revenue could issue you a letter indicating you failed to file a return there.

You will be able to claim a credit in Maryland for the taxes paid in Colorado on the income reported there to ensure you are not double taxed on the same income.

In TurboTax, here are the steps to help you prepare your returns.

On the black panel on the left, select "My Info"
Select "Edit" to the right of your name.
Scroll down the page and review the answers to your questions.
Ensure your answers to the state you lived in and any other state questions are answered correctly.
Pay special attention to the line at the bottom which asks if you earned money in another state. Confirm this entry is completed for Colorado since you have income reported as belonging to this state.

When you prepare your returns, prepare your non-resident state returns first. Make sure you answer the Colorado questions carefully to ensure you only pick up the income related to CO.

Prepare your Maryland return at the end. This will enable you to claim a credit for taxes paid to another state on your resident tax return.

While answering the questions in the Maryland state return, you will see a screen for Credits and Taxes. When you reach this screen, locate the section titled "Credit for Taxes Paid"

Select "Taxes Paid to Another State"
Answer the questions until you reach "Other State"
Here you will select the nonresident state where you paid taxes under "Other State"
Select Continue after entering the state name.
You will then be prompted to enter the portion of income taxed by the other state
On the next screen, enter the amount of tax from the Other State