I am currently working on 2015 federal and state income taxes and have a problem for which I can't seem to find an answer. Maybe there is a tax expert out there that can explain this.
Background-in 2014 I had a fairly large federal tax return, in excess of $15,000. This was primarily from wages earned thru early November 2014 in the state where I used to reside. During 2014 I moved to a new state, after retiring. The move to the new state was September 15, 2014. While completing 2015 state tax for the state I now live, I am required to list my federal tax return received as a result of 2014 federal taxes which increases AGI significantly. Very little of the $15,000 federal tax return was earned while living in my current state. Why should my current state of residence be entitled to add the entire federal tax return earned primarily in another state while residing in that other state? I think a pro-rated sum would seem more fair. What am I missing?
Background-in 2014 I had a fairly large federal tax return, in excess of $15,000. This was primarily from wages earned thru early November 2014 in the state where I used to reside. During 2014 I moved to a new state, after retiring. The move to the new state was September 15, 2014. While completing 2015 state tax for the state I now live, I am required to list my federal tax return received as a result of 2014 federal taxes which increases AGI significantly. Very little of the $15,000 federal tax return was earned while living in my current state. Why should my current state of residence be entitled to add the entire federal tax return earned primarily in another state while residing in that other state? I think a pro-rated sum would seem more fair. What am I missing?