Thank you NCPerson. Here are my responses to your questions:
1) Yes
2) Yes
3) Actually Colorado starts on Line 1 with the Federal Taxable Income (Federal AGA minus the standard deduction) and then on Line 6 subtracts an IRA distribution that was attributable to Colorado income. Trying not to confuse the issue, the financial firm that I have investments through inadvertently listed my mailing address (wife's place of residence) as my residence, and therefore, it is shown on the 1099-R with taxes paid to Colorado. Thus, the IRA distribution shown as a subtraction to our Colorado taxable income.
4) Yes. See 3) above.
5) That is correct.
6) Yes it is along with the Pension Benefits Subtraction I receive from Michigan.
7) The investment income was subtracted on the Colorado side and the calculated Colorado tax was brought over to the Michigan side to Line 18 and then a credit calculated. This is the crux of the issue. There is a worksheet in the TurboTax forms for Michigan that is titled "Credit for Income Tax Paid to Another State". To calculate the credit, it starts with "Income Earned in Another State or Locality Subject to Michigan Tax." I cannot determine how it calculated the dollar amount shown on Line 1 of that worksheet. What income did they include to come up with that figure? It doesn't show any calculations for that dollar amount.
