New client who was a student prior to 2011. Worked as apprentice in Nebraska (3 mos) , Arkansas (3 mos) and Minnesota. She is a Minnesota resident. One w-2 that shows withholding in all 3 states. The software program seems to work pretty well, preparing 3 state returns. based on income in each state. It creates a credit for the taxes paid in the other two states and allows that amount as a credit on the Minnesota return. I have no knowledge of the tax laws in the other two states. Am I safe to trust the software and finish the return? Any assurances out there?
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If client is indeed a full year Mn resident, which it appears from your post they are, then yes, all income would be taxable to Mn. with credit allowed for taxes paid to the other states. -
Every year I have some cases where clients maintain MN residency and temporarily work in other states and are also subject to those other states regs. Sounds like your software is handling the process correctly. I too am somewhat nervous that I got everything correct in the non-MN states because of my relative inexperience in working with those states' returns. I use Proseries and between the software and reviewing the non-MN states basic goverment instructions I feel safe though. I make up for those nervous feelings by charging accordingly!!!!
MacComment
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What to worry about
If the tax credits from the three states carry 100% to MN then if the returns wrong there is no harm to the client so not perfect can be acceptable depending upon your standards. However, many states have quirks that the software won't get right. In cases where the credits get reduced you might want to check the states pub to see what the additions and subtractions are.Comment
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