1040 states: Using the State if different fields on Screens K1, K1-2, K1-3, K1-4, K1-5. K1-6, K1-7, K1T, and K1T-2

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Question

When I enter amounts in the State if different fields in Screens K1, K1-2, K1-3, K1-4, K1-5, K1-6, K1-7, K1T, and K1T-2, the amount I entered in the Federal column still appears on my client's state return. Why?

Answer

A majority of state tax calculations begin with federal AGI. Other states do not use federal AGI. Instead, they build up the state income. Typically, this is a result of depreciation rules being different at the state and federal levels. For part-year resident and nonresident AGI states, the State if different fields are intended for state allocation. Resident AGI states' calculations are not affected by State if different amounts.

Related topic: 1040 state - Common data entry questions

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