State tax filing

CA has an agreement with VA, AZ, OR and Guam. CA gives you the credit for tax paid to VA instead of the other way around.

You do want to switch and claim the credit on the CA nonresident return.

1. Prepare the resident return first.
2. Then prepare the nonresident CA and claim a credit for the OR double taxed income and a credit for the double taxed income.  Since he happens to live in one of those rare states.
3. You get credit for the lower state tax on the lowest taxable amount.
   • Each state calculates taxable income differently.
   • Each state has its own tax rate/ system.
   • You get the lowest of both categories as a tax credit.

Anyone not living in one of those states/ territories should prepare the returns opposite.

Reference:

• 2024 Instructions for Schedules OR-ASC
• Other state tax credit | FTB.ca.gov

@StateCode   @PCP1