Incorrect Income Earned While a Nonresident

Question

I don't think freetax is picking up the correct amount. I work in CT and live in RI. Freetax is picking up the W2 wages box 1 in the "Income Earned While a Nonresident"  instead of just the CT wages in box 16 of my W2. This is triggering a larger refund than what I should be getting.  I am unable to edit this as well. I even see this message on the screen

"The amount of Connecticut wages shown in Box 16 of your Form W-2(s) is $XX, ****. This is probably the amount to enter as the Connecticut amount of your wages unless your employer didn't put the right amount of Connecticut wages in Box 16 of your Form W-2(s)."

What should I do. My federal is getting calculated correctly.

MatthewD · Answer

So both of you should contact Support so they can look at your account.  What some states do is use all your income to calculate your marginal tax rates. Then they prorate your taxes based on the % of income earned in their state.  It allows them to collect the maximum taxes from you.

Basically, those states are taxing you at the highest marginal rate.

rakeshs_m91 · Answer

https://community.freetaxusa.com/discussion/1964/incorrect-income-earned-while-a-nonresident

I am seeing the same, Did you get any response from the support regarding this?

AnneB · Answer

I'm having the same problem. On the "Nonresident  income" page, the correct RI income is suggested and that's what I enter into the RI income field. But then on the summary page, the total federal income between my husband and I is used to calculate my state taxes - resulting in too high taxes owed.