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forestj
New Member

Turbotax made mistake on CA other state tax credit (OR and some other states)

I moved from CA to OR during 2020, and I recently got an audit letter from (Fig. 1) OR saying I shouldn't claim other state credit from OR if the other state is CA, and asking me to pay thousands of dollar. I dug into Turbotax 2020 state filing and I found Turbotax was claiming California state tax credit on Oregon return (Fig. 2). It's a complete mistake (and it still is), as there is a clear contradiction between Fig 3 and Fig 4. 

 

 

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2 Replies

Turbotax made mistake on CA other state tax credit (OR and some other states)

Normally a taxpayer claims the "other state credit" on his or her resident state return.  The credit is then granted by the taxpayer's resident state, for taxes paid to the non-resident state.

 

CA and OR, however, are "reverse-credit" states.  This means that an OR resident with CA-source income would claim an "other-state" credit on his or her non-resident California returnfor the taxes paid to OR. 

 

If you had CA-source income after you became an OR resident, and you failed to claim the credit on your original CA return, you may want to file an amended CA return so as to correct the situation.

 

 

**Answers are correct to the best of my ability but do not constitute tax or legal advice.
forestj
New Member

Turbotax made mistake on CA other state tax credit (OR and some other states)

OK, I expect Turbotax can have that logic being built in so I would not be allowed to claim other state tax credit in that way.

 

Another annoying point is the way it creates amends. It seems I only need to create amend CA tax return not the federal tax return. But it doesn't allow me to do that and it did a federal tax amendment as well...

 

Finally, when I try to download the state tax return software on my computer (which is different from the one I used to file 2020 tax), it asks me to pay for it... I felt it shouldn't be this way because I paid it before...

 

I spent many hours on figuring out amending the CA tax for this... hope this can make Turbotax a bit better to avoid this in the future.

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