Allocating Income when moved states during the year

Forum|Forum|3 years ago
February 25, 2023
2 replies
13 views

Taxpayers moved from CA to NY in October 2022 - sold CA house, bought NY house. I entered the dates they lived in CA and in NY and the date moved out of CA to NY on screen 55.011 "State Part-Year/Non Resident Information". Lacerte does not seem to be allocating the state income based on the percentage of year residents in each state. Should it? If so, what could be my entry error be and if not, how do I allocate? Do I need to go into each income item and enter the amount of each income item based on the percentage for CA and then for NY?

Thank you!

Lacerte Tax

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Best answer by George4Tacks

You need to do allocation on where they lived when they got whatever income there is. https://proconnect.intuit.com/support/en-us/help-article/form-1040/allocate-amounts-multi-state-individual-return/L2oI1HNmM_US_en_US?uid=lek7qyp4 should help.

You will likely use Ctrl + E to open a 2 line detail with a CA income and NY income that totals the federal income. I would assume any gain on the CA house would stay in CA because they were living there at the time of the sale. You need confirm all of the details to do the allocation.

IRonMaN

Level 15

Lacerte is more sophisticated than ProSeries, but I don't think even Lacerte is powerful enough to know how much income was earned in each state just based on dates moved. I think you are going to have to help it along and tell how much income was earned by each state for the various income categories.

Slava Ukraini!

George4TacksAnswer

Level 15

You need to do allocation on where they lived when they got whatever income there is. https://proconnect.intuit.com/support/en-us/help-article/form-1040/allocate-amounts-multi-state-individual-return/L2oI1HNmM_US_en_US?uid=lek7qyp4 should help.

You will likely use Ctrl + E to open a 2 line detail with a CA income and NY income that totals the federal income. I would assume any gain on the CA house would stay in CA because they were living there at the time of the sale. You need confirm all of the details to do the allocation.

Answers are easy. Questions are hard!

L

LSTAXAuthor

Level 5

Thanks to both of you. That is what I suspected. Do you know how social security should be handled? Even if I allocate all to NY (just to test), nothing shows up under NY. The entire taxable amount shows up as a CA adjustment on CA 540NR as a subtraction, flowing from the CA-NR PT II line 6 social security benefits. Does that make sense?

L

LSTAXAuthor

Level 5

FYI for anyone that needs this info.- Lacerte handled it correctly. It adjusts out the entire taxable amount on both CA and NY return. Social Security income is tax-free on your New York State income tax return —regardless of income or the size of your Social Security benefit.

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