@DavidD66 ,
Thank you very much for the quick and detailed answer.
However, I have one additional question on this paragraph:
As an Oregon resident, 100% of your income is taxed by Oregon, even the income taxed by California. However, to prevent double taxation Oregon will give you a credit for the tax you pay to California. As you suggested, Oregon will only credit you for the amount they tax that income, not the amount you paid to California.
As I understand the rules, it's not Oregon, but California who will give me "other state tax credit".
Here are the links:
Oregon - https://secure.sos.state.or.us/oard/viewSingleRule.action?ruleVrsnRsn=20171
(a) Residents: An Oregon resident is allowed a credit for taxes paid to another state on mutually taxed income if the other state does not allow the credit.
California - https://www.ftb.ca.gov/forms/2020/2020-540-s-instructions.html
California nonresident individuals, estates, or trusts that are residents of one of the following states or U.S. possessions and paid a net income tax to that state or U.S. possession on income that is also taxed by California may claim the other state tax credit:
Arizona (AZ), Guam (GU), Oregon (OR), and Virginia (VA).
I read it the following way:
- Oregon will allow me tax credit, only if California doesn't allow.
- But because California allows tax credit for Oregonian residents, I should file it in California.
If you agree with my conclusion, can you please help to set the expectations?
- Can I expect all paid CA tax will be refunded? Or can it be only difference between CA (10.23%) and OR (8%) tax?
- What exactly should I do in TurboTax in order to claim this credit properly?
p.s. Another question (with both W2 and 1099-B reporting same income) is resolved. Thank you!!
