Thanks for the detailed explanation.
For my simplistic mind, I have included some dummy numbers below:
- Federal gross salary including W2 and interest/dividend: 100,000
- W2 salary while working in NC as non resident: 95,000
- Interest and dividend income: 5,000
Now, when SC 1040TC gets calculated for credit paid on taxes paid to other state, below information shows up:
- Line 1 is SC gross income after dependent deduction: 89,000
- Portion of line 1 taxed by another state: 95,000 (NC W2 income)
Because W2 salary is higher than the SC gross income, SC taxes are showing up as $0.
However, I am failing to understand that how and where SC state tax for resident on interest and dividend of $5000 is being paid.
