Mike,
Thanks for the quick feedback. I've looked closer at my state's line-by-line instructions.
This is the instruction for Line 4, Out-of-State Income:
"This is income from real or tangible personal property or business income in another state. This includes partnership gains and gains sustained by S corporations attributable to other states. It is not non-business interest or dividends, installment sale interest, salary/wages, pensions, unemployment compensation, gambling or income from personal services. (See instructions for line 16.) Provide a brief description of the type of out-of-state income deducted. Provide detailed schedule showing the type, nature and source of the income and copy of federal return. Documents submitted should reflect to which state(s) the income is attributable. Provide the other state’s return and/or Schedule K-1, if applicable."
Oklahoma does have a form 511-TX for claiming credit for taxes paid out-of-state, but per its instructions, it seems limited to only wages earned out of state:
"Line 1 Include:
• Only the amount of wages, salaries, commissions and other pay for personal services that is being taxed by Oklahoma and also the other state. Gambling winnings are considered income from personal services for purposes of this credit. Part-Year Residents include only the income for personal services that is included in the “Oklahoma Amount” column of Form 511-NR and that was also taxed by another state.
Do NOT Include:
• Income that is not compensation for personal services such as interest, dividends, taxable refunds, unemployment compensation, rental income and oil and gas royalty income.
- or -
• Retirement benefits that the nonresident state is prohibited from taxing such as IRA distributions, pensions and annuities."
My interpretation is that in Oklahoma, I'm back to my original question.
