H&R Block tax software (retired in SC, moved to TN)

[rmcelwee]

I lived in South Carolina when I retired in early 2021 (taxable income of only $8,000 from my job and $83K in LTCG from my brokerage acct) and then moved to Tennessee where there is no state tax. I would like to purchase H&R Block Deluxe+State software again this year but I don't know how the software is going to react to the move. We also sold our South Carolina house (gain of only $225K). I'm sure someone here has been in our situation before. Is the tax software capable of handling this or do I need to pay big bucks to a CPA this time?

[sengsational]

It does have an interview question about moving states, but I never used it. If you have an old copy of the software, just start a new return and answer the move question and see where it takes you?

[rmcelwee]

Quote:

Originally Posted by sengsational If you have an old copy of the software, just start a new return and answer the move question and see where it takes you?

I was going to try that if no one had faced this. Thanks!

[Sunset]

No idea, but I think you should look up the State rules for when is South Carolina considering requiring you to pay tax.

I imagine, it's based on the % of time lived in SC in the year. So if you were there 60/365 days then that's how much income to report. However, maybe they just go by income earned in the 60 days.
Basically you do need to look it up so you know if the software is doing it correctly or which option to pick if there is a choice.

In my dreams I think we will face this issue as well so I'm interested, and it turns out H&R Block does handle it for the online software, so it's likely it handles it for the download version. :

https://www.hrblock.com/tax-center/s...eral%20states.

[braumeister]

Quote:

Originally Posted by rmcelwee Is the tax software capable of handling this or do I need to pay big bucks to a CPA this time?

It's a very common situation. I've done it several times over the years, and TurboTax has always handled it just fine. I'm sure HRB will take care of it easily as well.

[bobandsherry]

I used HR Block several years ago when I moved from IL to FL. Had no issues with using it.

[USGrant1962]

H&RB will handle the partial year in SC.

[gromit]

I used HRB with no issue when I moved from Georgia to Tennessee. Its been just long enough I don't clearly recall the details, but you choose that you were a resident for only part of the year. You'll provide your SC part time resident dates (1/1 to move date) and what income was before the move and therefore taxable in SC. Since you're using a +state version of HRB, you will choose SC as the state you want to use with it. You won't need to do anything for Tennessee.


One added thought. Calculating part time resident income is based on that state's forms, so mine was Georgia. SC's should be similar, but you never know.

[rmcelwee]

I appreciate all the comments so far!

[RunningBum]

Look up SC's rules and then you'll know that your tax program is handling them correctly. I'm sure they will but I'd still want to check it myself.

[pb4uski]

From https://dor.sc.gov/tax/individual-income/faq

Quote:

... What are the filing requirements for a part-year resident? An individual who is a South Carolina resident for only a portion of the tax year may choose the filing method below that is the most beneficial: Compute South Carolina tax as a South Carolina resident for the entire year. File the SC1040 including all federal taxable income and use the SC1040TC to claim a credit for Income Tax paid to another state. Compute South Carolina tax using the Schedule NR. Include in Column B of the Schedule NR only the amounts that are taxable to South Carolina. Amounts taxable to South Carolina include all items of income, gain, loss, or deductions earned from South Carolina sources or while you are a South Carolina resident. File the SC1040 and attach the completed Schedule NR.

Since you moved to a no tax state you would use the second approach so your tax will be tax as if full year resident divided by total income times SC income.

[rmcelwee]

Quote:

Originally Posted by pb4uski Since you moved to a no tax state you would use the second approach so your tax will be tax as if full year resident divided by total income times SC income.

Thanks!

[Jeb-NY]

I use H&R and when we moved from NY to TN it worked fine. Don't remember the details but it wasn't a problem. I was also already retired when we moved.

[Jerry1]

Quote:

Originally Posted by pb4uski From https://dor.sc.gov/tax/individual-income/faq Quote: ... What are the filing requirements for a part-year resident? An individual who is a South Carolina resident for only a portion of the tax year may choose the filing method below that is the most beneficial: Compute South Carolina tax as a South Carolina resident for the entire year. File the SC1040 including all federal taxable income and use the SC1040TC to claim a credit for Income Tax paid to another state. Compute South Carolina tax using the Schedule NR. Include in Column B of the Schedule NR only the amounts that are taxable to South Carolina. Amounts taxable to South Carolina include all items of income, gain, loss, or deductions earned from South Carolina sources or while you are a South Carolina resident. File the SC1040 and attach the completed Schedule NR. Since you moved to a no tax state you would use the second approach so your tax will be tax as if full year resident divided by total income times SC income.

This is a good example of situations that happen when using a tax software program. It’s important to have some knowledge of how things should be handled so that you can make sure the software handles it correctly. Sometimes I’ve found that a tax program (Turbo Tax in my case) will have a default way of handling certain questions. And, if you’re like me and don’t follow the interview questions 100% then it may not pick up on the choice you need to make. Then, finding the right box to check or form to fill out becomes a pain. Now that you’re aware of this choice, you can make sure HRB handles it correctly and you’ll understand why it’s asking you the questions that it does. It’s not likely that the program would not be able to handle the situation, but you have to enter things correctly for it to do so.