@coolbean wrote:
The thing is, IL did not refund the excess that my employer withheld when I was not working in IL. They require a letter from my employer to refund this but my employer refused to provide it. I'm now trying to claim tax credit with CA to avoid being double-taxed. But according to the calculation (paying $1000 to CA on a wage that's already taxed in IL) I am still being double-taxed.
Here's what you should have filed.
It sounds like you were a part-year resident of IL and a part-year resident of CA, if your permanent home was in IL and then you moved to CA. (To be a non-resident of both states, you would have to have a permanent residence in some third state.)
Your part-year resident IL return will report and pay taxes on all your world-wide income from 1/1/22 to the date you moved (the date you changed your state of permanent residence). Your part year CA return will report and pay income tax on all your world-wide income you received starting on the date you moved through the end of the year. If you only had IL withtholding, you should be overpaid to IL and underpaid to CA, so get a refund from IL and owe to CA.
There are no tax credits here for a resident who paid tax in another state, that is only an issue for a non-resident return, and you should not have filed non-resident returns. You pay only CA tax for the part of the year you lived in CA and only IL tax for the part of the year you lived in IL.
Illinois should not need proof from your employer that you moved, they should only require proof from you that you moved (changed your permanent address).
I suspect you need to file amended returns with both states. If you are already in contact with IL, you should call them back, explain your situation, tell them you want to file an amended return as a part-year resident, and see if that will be acceptable to them.
You may need to hire a professional to help straighten this out.
