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02-04-2018 11:46 AM
We are flining our taxes with H&R Block, which we have done before with no issues. My husband began a new job in the state of IA in December. When trying to file non-resident state taxes for this state H&R Block is counting his total income as IA income and stating his IA taxable income is 16K. He only made 5K in IA but it is saying we owe $426. He already paid in $300. That is $826 for 3 weeks of work!!! What could be going wrong???
Solved! Go to Solution.
02-13-2018 07:26 PM - edited 02-13-2018 07:27 PM
Welcome to the H&R Block Community.
When filing a nonresident state tax return in the tax program, there should be an Iowa income allocation page to enter the dollar amount that the husband earned while he was in Iowa.
In the H&R Block online tax program, you would need to get to the "Part-Year and Nonresident Income Allocation" page by the following steps:
In the H&R Block desktop/downloadable software, the following are the steps to enter the Iowa source income for income allocation purposes in the IA nonresident return:
It should be noted that according to IA rules for part-year and nonresidents, the tax is calculated from all sources as if the taxpayer were a full year resident. Then, Iowa-source income and adjustments are reported to where the nonresident percentage is calculated by dividing Iowa-source net income by net income from all sources and subtracting the result from 100. This will then be used to determine what the net tax result would be for the IA nonresident return. Furthermore, what this means is that for IA non-resident returns, the IA is going to tax income from all sources before calculating how much of the tax is going to be applied on the IA non-resident return. So, even though the husband only made about $5K in IA, the IA non-resident return is going to tax him on all of his income sources before determining the final net tax amount on the IA return.
If you are continuing to have issues with this and you are using the H&R Block online tax program, you are more than welcome to use our Tax Pro Review service in having an online tax preparer review and make adjustments on the return. If you are happening to use the H&R Block desktop/downloadable software, the Tax Pro Review service is not available, but you can go to a local H&R Block tax office to handle the return from there. To search for a local H&R Block office, go to the following link for the H&R Block Tax Office Locator: https://www.hrblock.com/tax-offices/local-offices/
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Tax Research Specialist