Processing multiple-state returns (1040)

Alerts and notices

This topic provides general information and guidelines for processing multiple-state returns in the 1040 federal application.

Properly preparing federal returns

UltraTax CS transfers as much information as possible from the federal return to the state return to minimize the time and effort required to process a state return. There are several areas on the federal input screens where you are required to enter data specifically for the state return.

  • State fields that are not exclusively associated with an address serve various purposes. See State fields in UltraTax CS/1040 for more information.
  • F/S fields: Several federal statement dialogs contain federal-only and state-only (F/S) fields. If you are processing more than one state return, you must properly use the F/S fields in these federal statement dialogs. Some of the federal statement dialogs which offer this column are the Other income statement dialog on federal Screen Income, and the Interest income and Dividend income statement dialogs in federal Screen B&D.

    In general, use the F/S fields when the federal and state amounts are not the same. Enter F if the amount applies only to the federal return, and enter S if the amount applies only to the state return. Leave the F/S field blank if the amount applies to both returns. If the federal and state amounts are different, enter the transaction twice on separate lines in the statement dialog and indicate whether the amounts are federal or state using the F/S fields.

  • T/S or T, S, J fields: Many states require income and expense amounts to be reported as separate line items for married taxpayers filing joint returns. UltraTax CS provides taxpayer, spouse, and joint codes throughout the federal input screens for most income and expense amounts. It is important to note that amounts which have a blank T/S or T, S, J income default to taxpayer. Use code J when appropriate, to have UltraTax CS divide the amount equally between taxpayer and spouse. Use code S to designate the amount to the spouse.
  • State use codes: Federal input screens, such as Screen 1099R, and statement dialogs, such as the Other income statement dialog in federal Screen Income and the Interest income and Dividend income statement dialogs in federal Screen B&D, may contain State use or State use code fields or columns. Enter the appropriate code for the state you are processing to provide additional information about how the amount should be processed at the state level.

    Note: The codes that are available in State use or State use code fields are specific to the state postal code entered in the related State field for the date being entered. If state use codes are not applicable to the entered state, the State use or State use code fields will be disabled (shaded) or the state use codes will not be listed in the fieldview.

    For example, retirement income entered in federal Screen 1099R often needs special coding to be treated properly on the state return. Screen 1099R includes a State use field in which you can enter additional information pertinent to state processing. If federal retirement income is not taxable to the state being processed, enter an applicable state use code in the field. (A list of codes is available in the fieldview for the State use field.) Note that the taxpayer or spouse date of birth may be required for proper calculation. Enter date of birth information in federal Screen 1040.

  • Using Screen St Pmt: Screen St Pmt is used to enter all applicable information for estimated tax payments for states and cities or other types of returns. Screen St Pmt is a multiple-unit input screen. This means that you should complete a separate unit (copy) of the input screen for each state if you are preparing multiple-state returns.

Previewing and printing returns

You can preview all of an open client's returns online by choosing File > Preview. From the preview window, you can use the Print Page button to print a single page or the Print All button to print all of the client's return. You can also print returns using File > Print Returns. See Printing tax returns for more information.

Invoice: UltraTax CS automatically prints an invoice with the client's return(s). Because UltraTax CS prints only one invoice per client, complete all returns applicable to the client before printing. The invoice then lists detailed amounts for each of the client's returns.

Selecting the state return to process

You can add state returns for a client at any time. Adding a state or city return for a client

After you add a state return for a client, a button with the state's name appears at the top of the folder list in tax data entry. If you want to enter data for a state return, click the state's application button, and the state's input screen folders appear on the left side of your screen. You can switch between federal and state returns simply by clicking on the application buttons at the top of the folders block. See UltraTax CS function keys, F11 for more information.

Some states require both part-year and full-year resident returns to appear on the same forms. Some have resident and nonresident returns on the same forms. Other states have separate forms for residents, nonresidents, and part-year residents. UltraTax CS provides you with the appropriate choices of forms for the states you have selected in File > Client Properties.

When you enter data in federal input screens and statement dialogs, the first time you enter the state postal code of a state application for which you are licensed, UltraTax CS asks you if you want to add that state to your client (if you have not already done so). You will be prompted only once for each state.

If you proformaproforma a client who had a multiple-state return in the previous year, the appropriate states are automatically included in the folders list for that client. Note that if one or more of the states are no longer applicable, you can remove them using the File > Client Properties dialog. See Deleting a state/city return for a client for more information.

Overriding automatic calculations

You can override any of the automatic calculations on multiple-state returns. State returns that begin with federal adjusted gross income provide an AGI Worksheet, which you can use to override the calculated amounts. To use the AGI worksheet, switch to form view by pressing CTRL+F. Then, select the worksheet from the state's form folder list. The form ID is AGI. If this form is not provided with the state application, you can override calculated amounts directly on the form in most cases.

Processing two part-year resident returns

If you need to prepare two part-year resident returns, you can prepare the returns in either order.

  1. Choose File > Client Properties. Click the Add State button to add the state returns you want to process for this client. (See Adding a state/city return for a client for more information.)

    Note: You may need to modify the state return type in File > Client Properties if the client was a nonresident or resident last year but is a part-year resident this year.

  2. After you add the state returns, the application buttons for the states you have selected appear at the top of the folder list. Click the application button of the first state return you want to process. The state's input screens appear in the folder list. Click the desired input screen folder and then click the tab for the input screen in which you want to enter data.
  3. Enter state-specific data in the applicable state input screens. When processing more than one state return for a client, enter postal codes for income and deductions to indicate where UltraTax CS should report the item. Resident returns report all income regardless of postal codes entered, but part-year resident and nonresident returns report only those items indicated with the state's postal code. Note that you can preview the return by choosing File > Preview. See State fields in UltraTax CS/1040 for more information.
  4. Click the application button of the second part-year state and enter state-specific data on the state input screens.
  5. After you are satisfied the returns are correct, choose File > Print and print the client's returns. (See Printing tax returns for more information.)

Processing resident and nonresident returns

If you need to prepare a resident return and one or more nonresident returns, prepare the nonresident return(s) first. Prepare the resident return last.

  1. In the File > Client Properties dialog, add the state returns you want to process for this client. (See Adding a state/city return for a client for more information.)

    Note: You may need to modify the state return type in the File > Client Properties dialog if the client was a part-year resident last year but is a resident or nonresident this year.

  2. After you add the state returns, the application buttons for the states you have added appear at the top of the folder list. Click the application button of the first nonresident state return you want to process. The state's input screens appear in the folder list. Click the desired input screen folder and then click the tab for the input screen where you want to enter data.
  3. Enter state-specific data in the applicable state input screens. When processing more than one state return for a client, enter postal codes for income and deductions to indicate where UltraTax CS should report the item. Resident returns report all income regardless of postal codes entered, but part-year resident and nonresident returns report only those items indicated with the state's postal code. Note that you can preview the return by choosing File > Preview. See State fields in UltraTax CS/1040 for more information.
  4. If you have additional nonresident returns to process, click the application button of the next nonresident state return and enter the applicable data.
  5. After you are finished processing the nonresident state returns, click the application button of the resident state return and enter the applicable data. If you have processed the nonresident returns first, UltraTax CS automatically calculates income and taxes paid to those states and completes the appropriate fields in the Credit for taxes paid to other jurisdictions section in Screen STCr for the resident state. If there are multiple nonresident states, UltraTax CS automatically calculates this information for each state.

    In some states, there may not be any credit for taxes paid to other states due to the presence of a reciprocity agreement. In other states, there may be a reduced amount calculated and transferred to Screen STCr due to the presence of a reciprocity agreement or other special circumstances. Check the laws of the states you are processing and if necessary, adjust or override the amounts automatically calculated by UltraTax CS.

  6. After you are satisfied the returns are correct, choose File > Print to print the client's returns. (See Printing tax returns for more information.)

Processing part-year resident and nonresident returns for the same state

When you process a part-year resident return and a nonresident return for the same state, first determine which of the two returns will not have to be proforma'd next year. Only data for the last return you process for the state will be available to proforma. This means that when you add the state return for the client, you must first enter the return type you do not plan to process next year. After you are done processing that return, change the return type to the one that you want to proforma next year.

  1. Choose File > Client Properties. Click the Add state button to add the state return you want to process for this client. (See Adding a state/city return for a client for more information.)

    Note: Be sure to select the return type that you do not plan to process next year.

  2. After you add the state return, the application button for the state you have added appears at the top of the folder list. Click the state's application button in the folder list. The state's input screens appear in the folder list. Click the desired input screen folder and then click the tab for the input screen where you want to enter data.
  3. Enter the applicable data for the federal and state returns. Note that you can preview the return by choosing File > Preview.
  4. After you are satisfied the state return is correct, choose File > Print to print the client's state return. You do not need to print the client's federal return at this time. (See Printing tax returns for more information.)
  5. Choose File > Client Properties, and click the state's tab to change the state return entity type to the second state return. This will be the return from which you can proforma state data next year.
  6. Enter the applicable data for the federal and state returns. You may need to change postal code information on the federal return's input screens to appropriately complete the second state return. See State fields in UltraTax CS/1040 for more information.
  7. After you are satisfied the returns are correct, choose File > Print to print the client's federal return and second state return. (See Printing tax returns for more information.)

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