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Level 2
posted Oct 5, 2020 11:49:20 AM

Composite Tax Return: Virginia Schedule OSC, "Credit for Taxes Paid to Another State"

I am a Virginia resident and a shareholder in a Virginia pass-through S-corp. The S-corp has income in multiple states, and they file composite state K-1s on my behalf. This composite filing eliminates the need for me to file an individual return in these other states. They have provided me with a table containing the taxes paid to each state on my behalf, but I do not know how to enter these payments in Turbo Tax. Presumably, I would get "credit for taxes paid in another state". Virginia's tax docs suggest I fill out a Schedule OSC, which I cannot find within the TT web product. 

 

https://www.tax.virginia.gov/credit-for-taxes-paid-to-another-state

 

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2 Replies
Level 2
Oct 9, 2020 11:27:51 AM

Update, SOLVED. 

 

I spoke with TurboTax, and the solution to this is to temporarily add second state to force the application to show you the correct forms (pick  one of the states where your S-corp filed the composite K-1). Fill out that second state with barebones information, then select save. Go back over your home state again, and at some point in the flow, you will see a new question titled, "Credit for Tax Paid to Other States Summary." Fill out this table with all of the states and taxes that have already been paid, and these payments will be credited back to you. Be sure to delete the temporary second state before filing. 

Level 2
Apr 11, 2021 7:55:01 PM

This is a lifesaver - thanks for posting. One additional comment based on my experience doing this for 2020 taxes: once you've deleted the temporary state return, TurboTax will zero out the credit claimed for taxes paid to the temporary return state on the Schedule OSC on your Virginia return (but will keep credits for any other state that you entered). So you then need to go back into the Virginia return and re-add the taxes paid to that state.

 

They don't make it easy...