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here's the scenario: i file taxes in three states: massachusetts, new york, and rhode island. i was a full year massachusetts resident, and am filing non-resident forms in new york and rhode island. i completed my mass forms online using turbo-tax, and it seems that my student loan interest was used to adjust my massachusetts taxable income.

here's my question: can i deduct my student loan interest from my rhode island and new york taxable income? the instructions are somewhat hazy. basically, both new york and rhode island instruct me to "deduct that portion of your federal deduction that applies to income earned from ___________ (insert state here)."

i'm assuming that the massachusetts instructions said something similar, and that turbo tax rightly subtracted my student loan interest from my taxable massachusetts income.

so should i go ahead and subtract my student loan interest from my state based income, or leave it out?

any and all advice sincerely appreciated.

thanks,
debra
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First things first. You should prepare your non-resident state returns before you prepare your resident state return. Most states will tax all the earnings of their residents regardless of where the income was earned. In return, they usually give you a credit for some or all of the tax you pay to other states.

Second, to your specific question, your student loan interest doesn't apply directly to your income from any state, so it isn't deductible on these non-resident returns. The type of deductions that would be allowable include deductible IRA contributions, self-employed retirement and medical insurance payments, moving expenses, etc.

Ira
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thanks, ira.
i've finished my federal, rhode island, and new york forms. only massachusetts left to go.

debra
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