You are a resident of Indiana and a nonresident of Illinois. On the Indiana income tax return, you are eligible for a credit for taxes paid to another state.
The credit is calculated on Group A Worksheet on page 37 of the Indiana IT-40 Booklet. The Indiana IT-40 Booklet may be found at this website.
The lesser of the amounts on A, B or C is your allowable credit for taxes paid to other states. Since you are allowed a credit of $1,795. I presume that option A is $3,000 and option C is $1,875. The credit figure was computed from option B which states:
Multiply the amount of income from the other state (that is subject to Indiana tax) by 3% (.03)
We are not able to see the dollar amounts on the two tax returns. Please provide the proper income, deductions and withholding numbers that you calculate.
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