credit on 2023 return for tax paid in 2024???

[nsmks]

It is 2024, and I am filling out state tax returns for 2023. I am resident in CA and pay taxes in CA. I also received income in 2023 from AR, and must file an AR return for that income, which I will pay in 2024 when I file (and which will be deductible on my CA tax return).

But when I fill out my 2023 AR return, showing tax due to AR, Turbotax automatically gives me a credit for that amount on my 2023 CA return.

That's wrong, isn't it? I can only claim a credit for taxes paid to AR in 2023 on my 2023 CA return, not taxes paid in 2024. I think Turbotax is wrong to give me a credit on my 2023 CA return for taxes paid to AR in 2004.

Anyone else experienced this?

[BillM223 · Accepted solution]

Generally, it is the tax year that is the determining factor. Thus on your 2023 CA return, you can deduct taxes paid to other states on their 2023 returns. Think about it this way: you pay taxes to each state (and to the IRS) through out the tax year, not just the next year when you happen to file the return.

Please see Schedule S at the FTB website.