Entering state allocation data for 1040 state returns

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You can allocate amounts to states by entering a percentage of federal amounts, or by entering individual item amounts. An entry of zero (0) will prevent the state amount from defaulting to the federal calculated amount. If an individual item amount field is left blank, the federal amount, if present, is used in the state's calculation.

Build-up states that report or otherwise calculate income from Schedules C, E, and F, and Form 4835 activities on an amount by amount basis may be allocated using a percentage only, while passive carryover amounts may be allocated by entering the state specific carryover amounts within the State allocation spreadsheet. State-specific amounts may also be present if a prior-year carryover proformas to the current year.

Unlike income allocations, passive activity and section 179 carryover amounts apply to all residency statuses for CA, HI, KY, MA, MT, and WI, and part-year resident and nonresident statuses for CT, NY, and OR. Other states, which are typically AGI states that require net activity amounts only, may be allocated by percentage or by entering the net amount of activity income / allowable loss attributable to the specific state. For all states, other than NJ (for resident income purposes), MI, OK, and SC (for reporting out-of-state income), allocations apply only to part-year resident and nonresident processed states.

Note: Amount fields applicable to one state may not be applicable to another state. Those amount fields that are not used to calculate in-state income for a particular state are disabled (shaded). Amount fields that are not shaded are applicable for the state.

Use the following procedure to enter allocation data by state for the return.

  1. Open a 1040 client and choose View > Allocation to open the State allocation spreadsheet.

    Note: You must have at least one state return attached to the current client to open this spreadsheet and the State field on the main activity screen must contain a postal code.

  2. Click the desired tab and enter information in the State allocation spreadsheet.
  3. Repeat step 2 to complete data entry for the remaining states.
  4. Click Done when you finish entering information.

Tips

  • To delete data from one or more cells in the spreadsheet, see Deleting state allocation information.
  • To select an entire spreadsheet column, click the heading at the top of the column.
  • To select an entire spreadsheet row, click the component heading at the beginning of the row.
  • To select the entire spreadsheet, click the main component heading in the upper-left corner of the spreadsheet.

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