First of all, the educator expense is a income adjustment and not a credit. You would enter this in your federal return:
- Under federal>deductions and credits>employment expenses>show more
- Select teacher (education expenses) and enter the combined total of $455.
When this is entered properly, the amount will be shown on line 10a as a reduction against your taxable income up to that point. Your Illinois return will adjust the taxable income for that state to reflect the $455 expense. The second scenario you presented where you entered only in federal does sound correct because it does reduce taxable income but it doesn't reduce by the same amount of the expense because it is not a credit.
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