AmyC
Expert Alumni

State tax filing

You must file an Idaho return when your income is sourced there. See Idaho source income which states:

Idaho source income is income from either of these:

  • Transactions or activities that take place in Idaho
  • Property in Idaho

If you work purely from AL, you will have no activities in Idaho and do no need to file a return except for a refund.

If you have activities in Idaho, you will will have taxable income and need to file like this:

You will file AL since you are a resident. You don't say if you are part year or full year resident. Either way, AL will give you a credit due to the ID tax paid. 

 

Your resident state taxes all income but gives a credit for income taxed by another state.  Please carefully follow these directions to prepare the states in a special order. You may need to delete both states and begin again.

 

  1. First, prepare your non-resident  ID return. This creates your tax liability for the non-resident state. How do I file a nonresident state return?
  2. Then prepare your resident state AL return and it will generate a credit for your income already being taxed in the non-resident state. 
  3. The credit will be the lower of the state tax liabilities on the same taxable income. You may owe your resident state,  if they have a higher tax rate along with differences in how the taxable income is calculated.

 

It isn't possible for the program to create a credit before it knows the liability. Your returns may be wrong if you do not prepare the states in this order.

 

[Edited 2/19/2023 | 8:56 am PST] @mebeme_1963 

 

 

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