All Things Tax

All Things Tax

Like the title says, from the filing process and tax questions to tax policy and reform, you can search and share All Things Tax here. This is the place to find answers to all your general questions that don't fall under the other categories. And just a reminder: questions about software or online filing should be posted in DIY Products.

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Pioneer
Posts: 1
Registered: ‎02-04-2018
Accepted Solution

Nonresident state tax

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???

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Associate (Pioneer)
Posts: 107
Registered: ‎01-08-2018

Re: Nonresident state tax

[ Edited ]

Hello twoshayh,

 

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:

  1. Click State
  2. Find Iowa
  3. Click Continue
  4. Click Next several times until you get to the page called "Part-Year and Nonresident Income Allocation"
  5. On the screen for "Part-Year and Nonresident Income Allocation," look for the Iowa Amount column.
  6. Then, find the income-type row, such as "Wages, salaries, tips, and so on," or "Your interest," or "Your dividends," and enter the amount that the spouse earned in Iowa while he was there.
  7. Then, click Next several times.

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:

  1. Open tax return file
  2. Click State
  3. Find Iowa
  4. Click Prepare Return
  5. Click Next several times until you get to the screen that asks about entering the Iowa source income for a nonresident/part-year resident
  6. Then, once on the nonresident/part year resident screen that asks about entering Iowa source income, follow the next screen instructions to enter the dollar amount that the husband made while he was in IA.

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/

 

If you happened to have other issues and you need to contact Product Support, you can contact them by one of the following ways:

- For telephone support, call 1 (855) 897-8639

- For support via our online chat system, follow the steps in this link:

 

Lawrence,

Tax Research Specialist