Yes, it sounds
normal. The state where you work
(Louisiana) gets to tax you. The exception to this is when your home state
(Alabama) and work state have a reciprocity agreement, or when the state you
work in does not have personal income tax. Louisiana does have personal income tax, and Louisiana and Alabama do not have a reciprocity agreement.
The only way you would get everything back from Louisiana is
if your income there was so low that you didn’t owe tax. Getting back only a portion of what you paid to the state you work in
is incredibly normal. It is also correct for your job to have only withheld
Louisiana tax. If they withheld Alabama tax for you instead, that would be a
problem.
As a resident, you always have to file an Alabama return. On your Alabama return, you get a credit
for some or all of the taxes that you paid to Louisiana. This will keep
you from paying taxes on the same income twice. This is also a normal thing for
state taxes.
It’s entirely possible that you still owe a little bit to
Alabama, especially if the effective tax rate there is higher than Louisiana's.
You do want to verify that you are getting the credit for taxes paid to Louisiana
on your Alabama return:
· Click on State taxes tab, and verify that you
see both Alabama and Louisiana under Your State Returns- make sure Louisiana is
listed as Nonresident.
· Edit the Louisiana return first. ***Make sure
you come to the screen “Louisiana Income
Allocation.” In the box for Louisiana, ensure that you have
allocated the amount earned in Louisiana to that state. The amount would not be
$0, but should be from box 16 of your W2.*** Finish the rest of the Louisiana
questions.
· After Louisiana, go back to Your State Returns and
edit Alabama-Resident. Going through that return, you will eventually land at the screen “Summary of Taxes Paid to Other States”. You should see the State of Louisiana listed. This
credit is keeping you from being taxed twice.
You could very well owe a bit to Alabama, and you are getting credit on the Alabama return for what you paid to Louisiana.
