chadw Posted February 16, 2009 Report Share Posted February 16, 2009 I have a client that moved to michigan in June from NY. After filling out the W-2 information and going to the Michigan return it is doing something I don't think is correct. I am doing a NR form as he is now a part-year resident. He also got married and his wife is a full year resident of Michigan if that makes a difference. He didn't earn income from NY while he was in Michigan also. It is subtracting the $ earned in NY from schedule 1, but it is also calculating a credit on schedule 2. I thought that if you take the subtraction on schedule 1 you don't get the credit on schedule 2. Or am I completely wrong here. If I am not wrong, how do you stop ATX from taking both the credit and the subtraction. I guess maybe I am just confused. Thanks Chad Quote Link to comment Share on other sites More sharing options...
ajuroff Posted February 16, 2009 Report Share Posted February 16, 2009 When completing the NR, did you complete the dates the husband was a part year resident? Also, make sure the income is allocated there between Michigan income and other states income. Quote Link to comment Share on other sites More sharing options...
chadw Posted February 16, 2009 Author Report Share Posted February 16, 2009 When completing the NR, did you complete the dates the husband was a part year resident? Also, make sure the income is allocated there between Michigan income and other states income. Yes, for the filer I entered 6/1/08 to 12/31/08. I left the spouse empty as she was a full year resident. For the 3 column portion of the return. column b michigan only has the michigan earned income and column c has only the other state (NY) income. I think everything is entered correctly, but I don't get why there is a credit and a subtraction. I believe there should be a subtraction from schedule 1 but not a credit from schedule 2. I would love to be wrong on this though. Chad Quote Link to comment Share on other sites More sharing options...
ajuroff Posted February 16, 2009 Report Share Posted February 16, 2009 How did you enter the information from the w-2? (the one from NY) make sure you put NY in for the state. I believe it will automatically enter MI if it's a MI address on the return. Was there some type of local tax for NY? It might be caculating this as a MI "city tax" and giving the credit on the sch. 2 if MI is entered on the w-2 instead of NY. (hope this make sense) Quote Link to comment Share on other sites More sharing options...
chadw Posted February 16, 2009 Author Report Share Posted February 16, 2009 How did you enter the information from the w-2? (the one from NY) make sure you put NY in for the state. I believe it will automatically enter MI if it's a MI address on the return. Was there some type of local tax for NY? It might be caculating this as a MI "city tax" and giving the credit on the sch. 2 if MI is entered on the w-2 instead of NY. (hope this make sense) The state is NY on the entered W-2. There is no local tax withheld either. The credit is on line 5 of schedule 2 (income tax paid to another state). The credit is apportioned down by the percentage of NY income to MI income. But even then the NY income is being divided by the lower Michigan income because of the subtraction from schedule 1. I may just have to override the system. thanks chad Quote Link to comment Share on other sites More sharing options...
ajuroff Posted February 16, 2009 Report Share Posted February 16, 2009 Sorry, delayed response here. Try to "bunny hop" from line 5 to the worksheet. Check line 1 and 5 on the worksheet. See what's there. Quote Link to comment Share on other sites More sharing options...
taxtrio Posted February 16, 2009 Report Share Posted February 16, 2009 I've had ATX do the same thing in the past. No, you cannot take the "credit" for tax paid to another state unless you are a full year michigan resident and are not subtracting the income on the NR. As usual with the state return, many times you have to use your knowledge of the tax law and make the necessary adjusments. Just zero out the tax paid to the other state on the worksheet/or line where ATX is putting it. The most annoying thing I think ATX does with the Michigan reuturn is to add the MI 1040-D to the return everytime you have any capital gains on the federal. That form is only used when you have a cap gain/loss from property owned before 10/1/1967.... So we almost never need that form. I am always deleting that one. Taxtrio Quote Link to comment Share on other sites More sharing options...
chadw Posted February 16, 2009 Author Report Share Posted February 16, 2009 I've had ATX do the same thing in the past. No, you cannot take the "credit" for tax paid to another state unless you are a full year michigan resident and are not subtracting the income on the NR. As usual with the state return, many times you have to use your knowledge of the tax law and make the necessary adjusments. Just zero out the tax paid to the other state on the worksheet/or line where ATX is putting it. The most annoying thing I think ATX does with the Michigan reuturn is to add the MI 1040-D to the return everytime you have any capital gains on the federal. That form is only used when you have a cap gain/loss from property owned before 10/1/1967.... So we almost never need that form. I am always deleting that one. Taxtrio Thank you. I thought I was losing my mind. Thanks for a little reassurance Quote Link to comment Share on other sites More sharing options...
ajuroff Posted February 17, 2009 Report Share Posted February 17, 2009 Nope, you're not. :scratch_head: Quote Link to comment Share on other sites More sharing options...
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