State fields in UltraTax/1040

Alerts and notices

State fields that are not exclusively associated with an address serve various purposes. State fields are designated in various screens and statements as State postal code, Postal code, and State and can be used in UltraTax CS as follows:

  • Part-year resident and nonresident return processing - Enter the part-year or nonresident state postal code in the state field in the screen or statement to designate the associated income, expense, withholding, payment, or deduction to the state indicated. If the state's postal code is entered in the field, the associated amount is used in calculations as sourced to the state. If a state application includes a state-equivalent version of the related federal screen, data entered federally transfers to the state screen. Amounts associated with the screen are available for in-state source calculations if the state's postal code is entered in the state field. A postal code is used to distinguish between worldwide and in-state sourced calculations. If the state field is blank, the associated income, expense, withholding, payment, or deduction is disregarded when calculating in-state or state-sourced amounts.
  • Resident state return processing - Some states allow a resident taxpayer to adjust their state income by out-of-state sourced amounts. Out-of-state amounts are identified by the postal code entered in the state field associated with the amount. If the state field is blank, the amount is disregarded when calculating eligible out-of-state adjustments.
  • State allocation - All applicable states processed for any return are presented in the State allocation spreadsheet, except for state allocation of supplemental business expenses (SBE) entered in Screen 2106. (SBE allocation is available for AL, CA, HI, MA, PA, and WI.) State allocation spreadsheets are available in activity screens for Schedule C; Schedule F; Form 4835; Schedule E, Pages 1 and 2; and Form 6198, as it relates to those activities. A postal code must be entered to access the allocation spreadsheet. The state postal code entered in the state field affects the treatment of all states that appear in the State allocation spreadsheet. The postal code entered in the state field is treated as the primary state within the spreadsheet and all income or loss associated with that unit is used in in-state sourced calculations unless otherwise allocated. If a resident state is processed, the resident state is treated as primary even if that state's postal code is not entered in the state field. All other states in the spreadsheet are automatically assigned 0 (zero), which means income or loss associated with that unit is not sourced to that state unless otherwise allocated.
  • State use, Local, and City code fields - The state postal code entered in the state field dictates which codes, if any, UltraTax CS displays in many of the related State use, Local, and City code fields. State use fields specify that the amount is subject to special treatment for state calculations. Local and City code fields are used to specify that the amount is related to the specified locality.

    Note: Amount fields applicable to one state may not be applicable to another state. Those amount fields that do not apply to a particular state have been disabled (shaded). Amount fields that are not shaded are considered enabled for the applicable state.

  • Activities with assets - The postal code entry in the activity's state field is used to complete the Situs field for assets entered in the asset module. A situs should be entered for Schedule A assets.
  • Other returns - Other returns processed in conjunction with a state return, such as unincorporated business or LLC returns, may rely on the presence of a postal code in the state field, or a code in a state use field, to distinguish between amounts or activities subject to the other return's reporting requirements, amounts, and activities that should be disregarded during calculation.
  • Electronic filing - Certain amounts, such as withholding, are not considered in-state sourced by the state taxing authority if a postal code is not entered in the state field. If a postal code is not entered in the state field, and an amount appears as withholding on the associated state return, the electronic file may be rejected.
  • Two-dimensional bar codes - Some states produce two-dimensional bar codes that summarize return information in a scannable format. Certain amounts, such as withholding, are not considered in-state sourced by the state taxing authority if a postal code is not entered in the state field. If a postal code is not entered in the state field, and an amount appears as withholding on the associated state return, the paper return may be subjected to hand processing and state taxing authority notice.
  • Partnerships, S Corporations, trusts, and estates - Enter a postal code in the K1 and K1T screens any time you are processing a state return.

The state field can be ignored when:

  • a state return is not being processed or the return is not being combined into a domestic partner return to prepare the combined state return.
  • a resident state is being processed and the calculation of the return does not require any special handling of income, expense, withholding, payment or deductions.
  • processing a part-year resident or nonresident return and the income, expense, withholding, payment, or deduction is not reportable as in-state sourced.

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