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Bootkanp
Level 1

IL based consultant getting double taxed on out of state income

I am a resident of IL who travels frequently to IN as part of my consulting job. I pay IN income tax on the part of income made in Indiana (as a non-resident in IN) and pay IL state tax on the entire income (as resident in IL). I am basically getting taxed twice on the same income: first by the non-resident state (IN) and second by resident state (IL).

Turbo Tax doesn't allow me to file state taxes online and the error message I'm getting is "Return cannot be e-filed when the sum of IL wages plus out of state wages on all W-2s does not equal total wages reported on IL schedule CR." I followed this option last year and IL rejected my refund request on the amount that was already taxed by IN. Has anyone run into this? What are my options?

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Accepted Solutions
Anonymous
Not applicable

IL based consultant getting double taxed on out of state income

you have to file 2 state returns. one is as an Indiana non-resident  - this state return must be completed first in TT.  Then you finish IL resident return where the CR form should compute the credit for the double-taxed income.   when you e-file IL - TT should send an electronic copy of In along with the IL return and if you e-file In a copy of that return goes there.  before filing make sure that for the CR form all your wages are in Column A and only In wages are in Column B. in addition there may be certain amounts for other lines that may have to be pro-rated.

 

note that we can not see your w-2 or tax return. ,

 

see these instructions for the Cr form to determine what items may be affected

 https://www2.illinois.gov/rev/forms/incometax/Documents/currentyear/individual/il-1040-schedule-cr-i...

View solution in original post

1 Reply
Anonymous
Not applicable

IL based consultant getting double taxed on out of state income

you have to file 2 state returns. one is as an Indiana non-resident  - this state return must be completed first in TT.  Then you finish IL resident return where the CR form should compute the credit for the double-taxed income.   when you e-file IL - TT should send an electronic copy of In along with the IL return and if you e-file In a copy of that return goes there.  before filing make sure that for the CR form all your wages are in Column A and only In wages are in Column B. in addition there may be certain amounts for other lines that may have to be pro-rated.

 

note that we can not see your w-2 or tax return. ,

 

see these instructions for the Cr form to determine what items may be affected

 https://www2.illinois.gov/rev/forms/incometax/Documents/currentyear/individual/il-1040-schedule-cr-i...

View solution in original post

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