How to download multiple states in turbotax for free

Some states require you to calculate your tax as if you were a resident in the state for the entire year. In other words, you determine your state's taxable income as if you were a full-year resident and calculate a full year's state tax on this taxable income. You then apply the apportionment percentage to this tax to determine the tax you owe in the new state. Other states require you to prorate your itemized deductions, personal exemptions and certain other allowable deductions and credits using your apportionment percentage, so the taxes you pay to the new state are based on this prorated amount.

As a nonresident, you still have to use an apportionment schedule to determine how much tax you owe in each state, but the interesting twist here is that you also pay tax on all of your income for the entire year to your resident state. Why do the apportionment schedule, then? Because you pay taxes on what you earned in the temporary state in addition to what you pay to your resident state.

Does this sound like double taxation? It is, except that most states usually allow a credit on your resident return for the taxes you paid to the other nonresident state. This usually means that you won't pay any more tax than you would if you didn't have to complete the temporary state's return.

But if your nonresident state has higher taxes than your resident state, you might end up paying more in total taxes because your resident state won't allow you a full credit. Also, if you have enough deductions to significantly reduce your taxes for your resident state, but don't have any of those deductions for your temporary state, you might have to pay higher taxes overall.

If this is the case, you won't have enough resident state taxes to use the full credit from the nonresident state, and you can't carry over the excess nonresident taxes to use as a credit in a later year. You may have to file more than one state income tax return if you have income from, or business interests in, other states. Here are some examples:.

Fortunately, in most cases your resident state allows you to take a credit for the taxes you have to pay to the other state, as in a temporary residence situation. Check your state tax website for information on whether your state offers this credit. Guides you through the latest tax laws with ease. Imports last year's data from TurboTax and other tax software. Additional Help for investment sales such as stocks, bonds, royalties, mutual funds and employee stock plans. Extra guidance for rental property income, expenses, and refinancing.

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