Correct. Your resident state taxes all income but gives a credit for income taxed by another state. Please carefully follow these directions.
You will need to prepare both CA and NM in a special order. You may need to delete both states and begin again.
- First, prepare your non-resident NM return. This creates your tax liability for the non-resident state.
- THEN prepare your resident state CA return and it will generate a credit for your income already being taxed in the non-resident state.
- The credit will be the lower of the state tax liabilities on the same income. You may owe your resident state.
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.
If you followed these steps and the credit is not showing, you may want to contact a specialist that can work through that section of the return with you.
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