I moved to IL from NYC. I’m encountering errors filling out Schedule CR.

[lokilokiloki]

Here's my situation:

• I lived in NYC until June 2020. I moved to IL.
• My job did not change. I work with the same company in NY the entire year. Working remotely from IL.

I’m trying to fill out Schedule CR to get credit for tax paid to another state and I’m getting the following error messages when TurboTax runs a final review before e-filing.

Error 1

Return cannot be e-filed when the sum of Illinois wages plus out of state wages on all W-2s does not equal total wages reported on IL Schedule CR. 

Error 2 

Part-year Returns with Credit for Tax Paid to Other States (Schedule CR) are ineligible for electronic filing

I’m lost to why error 1 is happening despite me re-checking my W-2. 

Question 1

It seems to come down to the ‘Allocate your Illinois and non-Illinois amount’ screen in TurboTax. No matter what number I put down for the ‘wage, salaries, tips’ for the ’Non-Illinois Amount’ (Schedule CR, Line 1, Column B) gives me the 1st error message. What am I doing wrong? Is it my W-2 form? 

Question 2

For my W-2 From, my NY wage shown in Box 16 is the same as Box 1 (which shows my total wages). But my IL wage shows correctly what I earned while living in IL. Is the NY wage in Box 16 correct due to how NY report wages? Do I need to request a correction to my W-2 so Box 16 shows just the NY’s portion rather than my total wage? 

Question 3

On the iIllinois Base Income Taxed by New York’ screen, for the ‘Income Taxed by New York’ field, is this the number from Box 16 of my W-2 form? For ‘Tax Paid to New York’ field, is this the number on Line 58 of my NY IT-203 form?

Question 4

Just to double-check, in my situation I will have to file a part-year resident return for both NYC and Illinois, correct?

[TomD8]

Box 16 of your W-2 is correct.  NY can tax all your income, including your earnings after moving to Illinois.  That's because, when you work partially within and partially without New York State during a tax year, NY considers the out-of-state portion to be taxable by NY unless you are required by your employer to work remotely and are assigned to a bona fide office of your employer in the remote location, and are not working remotely for your own convenience.  This is known as the "convenience of the employer" rule, which a few states employ.  This NY Tax publication gives the details of that policy:

https://www.tax.ny.gov/pdf/memos/income/m06_5i.pdf

Since your your NY Box 16 includes all your income, your employer regards your remote work as subject to NY taxation.

IL can tax only the income you earned after you became an IL resident.

Since you moved during the tax year, you should file as a part-year resident in each of the two states, and allocate your income accordingly.  You will allocate 100% of the income from your NY job to the NY return;  you will allocate only the portion earned after you became an IL resident to the IL return.

IL will give you a credit for the NY tax you paid on the portion of your income taxed by both states.  That portion - not the full NY Box 16 amount - is the "Illinois base income taxed by NY."  You may have to calculate the pro-rated NY income - and the pro-rated withheld NY taxes - manually.    

[lokilokiloki]

Thank you for the reply back. It all makes sense and I checked that the numbers on my forms reflect your advice. I guess my remaining issue is with the TurboTax product itself still giving me this same error when I run Smart Check.

Error 1:

Return cannot be e-filed when the sum of Illinois wages plus out of state wages on all W-2s does not equal total wages reported on IL Schedule CR. 

Despite checking my numbers multiple times, I can’t seem to fix this. Is this a possible bug with the product? There's an additional message from TurboTax below the error that states I can still mail my Illinois state return despite this error but I don’t want it be rejected if the numbers on my Schedule CR somehow aren't accurate. 

[TomD8]

Be sure you complete the NY return first, before the IL return, so that the other state credit is calculated and applied correctly.

I'd suggest you carefully review Illinois' printed instructions for Schedule CR, particularly the specific instructions on pages 1-2 for Column A and Column B.  Here's a link to those instructions:

https://www2.illinois.gov/rev/forms/incometax/Documents/currentyear/individual/IL-1040-Schedule-CR-I...

If you determine that your Schedule CR is correct, and you still can't e-file it, just print the Illinois return and mail it in.

[lokilokiloki]

Thanks again for your reply. After looking through Schedule CR, I found out what my issue was.

On Schedule CR Line 1, column A asks you for your total wages and column B asks you for the Non-Illinois portion. On the ‘Allocate your Illinois and non-Illinois amount’ screen in TurboTax, the corresponding entry field for column A is labeled ‘Illinois Amount’ which is incorrect. After I typed in my total wages in that entry field instead of entering just my Illinois portion, the error went away.

If there is someone else out there experiencing the same error and can’t seem to find out why, the mislabeled text field in TurboTax might have been the reason.

[DianeW777]

Thank you for your information, we are investigating based on your findings.

[daning]

I used your advice for my situation and it worked. Thank you so much for contributing to this thread!