All states do things differently, but usually when a state gives credit for taxes paid to another state, it is only up to the amount you would have paid in the home state.
For example, say you earned 10,000 in Arizona as an Indiana resident and paid 4% Arizona State tax on that income. That tax would have been $400.00.
Indiana tax rate is 3.23%, so the tax on 10,000 would be $323.00. Indiana will only give you a credit of 323 on the 400 you paid.
