MultiState Issue

I have done a couple of Multi-state returns now and can't seem to get Lacerte to pick wages up properly and allocate them to the correct state. I enter the W2 wages correctly by their source state, but it never goes to the State returns correctly, and it never reports correctly on the MultiState summary either. I was wondering if anyone else was having this same problem and what support has said about it. If you find something out please post it.

I made myself 2 "how-to" crib sheets years ago (and threw them, as private notes, into a dummy file named STATWAGE), and I think they still work now. I'll share them with you.

CRIB SHEET #1:
"How-To" crib sheet forever, for 2 possible reasons:
(1) Person moves to or from PA, from or to a New England state or elswehere;
(2) PA full-year resident works in NJ for an "idiot boss."

REMEMBER FOR ALL TIME (and teach new people):
Don't EVER use "state if different" on WAGES, when someone is a PART YEAR RESIDENT! It wreaks HAVOC. For example, it wreaked havoc on original '95 CT return of a former client, by throwing in an illegal "wage adjustment". I had to pay that client's penalty and interest to CT because of my goof.

The proper way to deal with those wages:
Use the "Federal wages" screen, and input as follows, with Ctrl-E:
CT - the CT wages
PA - the PA wages, up to the amount of Federal (if Fed < total state)
PA - source code "S" if necessary - the rest of the PA wages, in
a case where someone has a 401K plan, etc.
- - - - - - - - - - - - - - - - - - - - - -
If, say, CT wages = simultaneously KS non-resident, you input:
PA - the PA wages
CT - the CT wages (a/k/a KS wages)
KS - the KS wages, with source-code S for state

If Federal wages ever HIGHER than wages of all states combined, then to make Federal wages come out right, have to invent a "US" to make up the difference.

Simplified Example:
PA wages are $5000
CT/KS wages are $6000
Federal is not $11,000 as you'd think but is $11,500 instead:

Input in Federal wages field:
5000 - code as PA
6000 - code as CT
500 - code as US
6000 again - code as KS but also as "S" source

CRIB SHEET #2:
For full-year PA residents with "idiot" NJ* bosses:

Whenever necessary to force "all-states" column on NJNR to state wages by law, instead of Federal wages, remember:
Federal wages go in Federal usual spot, with "real" state as the state, and nothing in "source" column.
State wages go in the usual "state wages if different" spot, the "real" state as the state, again nothing in "source" column.
State wages get repeated right below, with the non-resident state as the state, and the code "N" which means "non-source."

*This does not really include Maryland, even though from the taxpayer's viewpoint, it's the same problem. On the MD return, we're usually not concerned with getting the "Federal" column to be any different than the way Lacerte makes it come out automatically. On a NJ non-resident return, we MIGHT BE concerned with getting the "everywhere" column to be "in synch" with NJ law, rather than using Federal figures which Lacerte will give us if we do nothing fancy. If we need a NJ NR return to be "correct," this particular crib sheet says how to do so.

If we aren't concerned with how the NJ or MD non-resident return "looks," then none of these crib sheets is a big deal (neither this one referring to "idiot" bosses, nor the other one referring to part-year residents and avoiding the "no-no" of using "state wages if different")

-- AL -- 3/21/01, latest update 2/13/06

More than 50% of my tax practice is multi-state returns. If you want to enter only one W-2 on screen 10, there is a drop-down box for the states, federal, state w/h, etc. Type in the W-2 info then tab to the state(s), click on the drop-down box and select all the states you need (you might need to add the states AZ and TN). Close. Tab to Wages, Cntl-E. Type in State Wages (16) as Federal. Close. Should add to Box 1 on W-2. Tab to Fed W/H and enter Box 2. Tab to SSW enter Box 3. SS W/H should calculate. Tab to MCW enter box 5. MC W/H should calculate. Tab to State W/H. Cntl-E. Enter Box 17 for each state. Also, go ahead and use Cntl-E to enter SDI for CA. For E-File, type in the FEI and then use Cntl-E again for the state ids.

FYI - Check Client Info screen towards end to see if you need to enter any additional info for the other states, county codes, etc. Check Client Miscellaneous screen to turn on direct deposits for additional states. Then check screen 55 for each additional state to see if any entries need to be made here, for instance typing in state of residence. Some states will only allow deductions for non-reimbursed employee business expenses specific to that state, so again just use Cntl-E on Sch A or Form 2106. A great website for links to state tax publications so you can read the state code get nonresident county codes is http://www.taxadmin.org/fta/li....

Good luck!