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Allocate income to states in the K1 state allocation spreadsheet
Allocation methods
You can use the following 2 methods to allocate income to the states appearing in the spreadsheet.
note
- Amount fields that apply to 1 state may not apply to another.
- Amount fields that don't apply to a particular state are turned off (shaded).
- Each section of the following screens is assigned a separate tab to help with data entry:K1,K1-2,K1-3,K1-4,K1-5,K1-6,K1-7,PBasis1,PBasis2,SBasis1,SBasis2,K1T,K1T-2,K1T-3, and6198(if present).
- Percentage: Enter a percentage inXXX.XXformat in the 1st field available on the State allocation spreadsheet. Select the state to which this percentage applies, thenApply.note
- All current-year federal amounts present for this unit appear in the selected state's column, multiplied by the percentage entered for that state.
- The percentage entered for that state will also appear after the state name for future reference.
- You can change individual amounts from the calculated amount.
- Carryover amounts aren't multiplied by the percentage. You should enter them individually.
- Amount: In cases where percentages of federal amounts don't apply, you can enter individual amounts for the state.Zerois a valid entry and will prevent the state amount from defaulting to the federal amount. If you leaveAmountblank, the federal amount, if present, is used in the state's calculation.noteIf you enter Ohio amounts instead of a percentage of federal, you'll need to make further data entries. In the Ohio system, go to theBUSscreen in the Income and Adjustments folder. To calculate Form IT-NRC, enter either an Ohio apportionment ratio, or the factors for apportionment of business income.
Primary state behavior
The ZIP Code you enter in the
K1
or K1T
screen, regardless of residency, will be considered the primary state for that unit, if that state is attached to the client being processed. The primary state always appears 1st in the State allocation spreadsheet. The SID
fields in the K1
or K1T
screen will be used to populate the 1st column of the spreadsheet. If an SID
amount isn't entered and remains blank in the spreadsheet, the federal amount will be used to process income for that state.If the primary state for that unit is attached as a nonresident or part-year resident, a 2nd primary state will appear in the State allocation spreadsheet if a resident state is attached and being processed for the client. The purpose of a 2nd primary state is to allow for blank spreadsheet amounts to default to federal amounts for the resident state being processed. The 2nd primary state, if present, always appears 2nd in the State allocation spreadsheet.
All other attached states for this client will appear in the State allocation spreadsheet, in alphabetical order as secondary states. These other nonresident and part-year resident-processed states will be assigned
zero
in every applicable spreadsheet amount field. Until an amount has been entered for a secondary state, no income will be transferred to that state from this unit.If the ZIP Code represents a non-UltraTax/1040-process state (Nevada, for example), the amounts entered in the
SID
fields will be reported as Other
next to the last column in the spreadsheet. The last column within the spreadsheet represents federal amounts, which may be used for reference only during data entry within the State allocation spreadsheet. In this case, the primary state will be determined by searching for any states being processed as resident, and if none, the 1st alphabetically attached state being processed.Data entry for different categories of states
States fall within certain categories based on their calculation needs.
- Full build-up states, AL, CA, HI, MA, and WI, normally require that differences (depreciation, for example) are presented in a format similar to the federal return presentation.
- Partial build-up states, KY, NJ, and PA, require less detail or specialized calculations that differ from the federal return presentation.
- AGI states, AR, AZ, CO, CT, DC, DE, GA, IA, ID, IL, IN, KS, LA, MD, ME, MI, MN, MO, MS, MT, NC, ND, NE, NM, NY, OH, OK, OR, RI, SC, UT, VA, VT, and WV) require that the in-state portion of federal AGI be reported for part-year resident and nonresident returns. These part-year resident and nonresident amounts are transferred and calculated using the AGI Worksheet.
- States that aren't affected by the State allocation spreadsheet are NH and TN, andTrust paid state estimated taxwithin the K1T allocation spreadsheet is used by all processed states.
- AGI states:
- SIDfields are available for use for all part-year resident and nonresident AGI states. There's a limitation to the calculation that will result for part-year resident and nonresident AGI states, except New York.
- Amounts entered in theSIDfields need to be entered aslimitedorallowable.noteFor example, if a (10,000) SID amount is entered in theK1screen or within the State allocation spreadsheet for Ordinary income (loss) from trade or business, a 10,000 loss will be transferred, as entered, directly to the state without regard to at-risk or passive loss limitations.
- The federal amount columns on the AGI Worksheet won’t be affected by any spreadsheet data entry.
- The6198screenSIDfields aren't intended for use by AGI states, except for New York part-year residents and nonresidents.
note- New York: Amounts entered for part-year resident and nonresident New York taxpayers are used to complete Form IT-182, Passive Activity Loss Limitations, basis and at-risk worksheets. Only New York source amounts are used to complete Form IT-182. Therefore, the calculation may differ from federal Form 8582.
- Montana: Montana-sourced passive activity losses should be entered in the State allocation spreadsheet.
- Kentucky Note: Kentucky-sourced passive activity losses, basis, and at-risk amounts should be entered in the State allocation spreadsheet.
- Connecticut-sourced passive activity losses and basis amounts should be entered in the State allocation spreadsheet.