pro-rated mortgage interest and tax deduction?
i moved from from maryland to new york state at the end of october 2008 and i sold my home in maryland when i moved. i have claimed all of my mortgage interest and real estate taxes on my federal return. however, for my part-year-resident return in MD, they want me to pro-rate my entire deduction, even though i paid all of it while i was a MD resident. is it OK to claim all of the interest and taxes since i paid them all while i was a resident of the state? they want to pro-rate it to ~75%, which ends up being a difference of $150 in the refund. not exactly. i already took out my income from new york on line 13. because i was only a resident for 10/12 months, i have a use an "income factor" (see instr. #26 for form 502) to reduce the amount of my deduction by the fraction of income that i made outside of MD ($20K MD income / total income = 0.782). however, all of my deductions pertain to payments i made while a resident of MD, so i should be entitled to claim 100% of them, not 78%.
Public Comments
- MD taxes can be a real PITA. You are talking about using the itemized deduction versus the standard on the MD return, right? Are you filling out a form 502? Because there is an area for subtracting the income you earned while not a resident. Where is it pro-rating? What are you doing your taxes on? Try doing them right through the Comptroller's website and see if the numbers come up the same as whatever you are using.
