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Adding a state but not processing it/paying for REP

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Level 2

Just want to verify steps to take before doing it.  A college student has a W-2 from the college state, but the withholding on it is less than what it would cost to REP for that state.  We would just not file that state and forego the withholding.  But I want to not have it as income on his home state return.  I would like Lacerte to allocate that W-2 to another state but not process that state return.  It is a state that we have done other returns in so it has been loaded previously for other clients.  If I add a state on the client info screen, can I still tell it to process without that state?

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Level 15
Level 15

"But I want to not have it as income on his home state return. "

All income is taxed in your resident state...so Im not quite sure what you're referring to here.


♪♫•*¨*•.¸¸♥Lisa♥¸¸.•*¨*•♫♪

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Level 15
Level 15

"But I want to not have it as income on his home state return. "

All income is taxed in your resident state...so Im not quite sure what you're referring to here.


♪♫•*¨*•.¸¸♥Lisa♥¸¸.•*¨*•♫♪

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Level 2

You're right, I forgot, it would only help if he got a credit for tax paid out of state, which is what I will have to check on.

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You can code the W-2 to the nonresident state without adding that state in the client info screen.  Check multistate return in client info, but don't add a state in the popup. Then code the W-2 as US to the right of the wage numbers, and use the correct state in the E-filing (W-2 State / Local) section). Be sure any state withholding isn't coded to the resident state.

I find it's more cost effective just to REP the state and file the return (and charge the client for it) than it is to fiddle with workarounds.

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