Where are state tax exemptions on turbotax?

[JillS56]

Please clarify the state?

[pc5000-hotmail-c]

Illinois

[LenaH]

State tax exemptions either reduce or entirely eliminate your obligation to pay tax. Most taxpayers are entitled to an exemption on their tax return that reduces your tax bill in the same way a deduction does. 

The standard personal exemption for Illinois is calculated using the basic exemption amount of $2,050 plus the cost-of-living adjustment. For the tax year beginning January 1, 2021, it is $2,375 per exemption. If you (or your spouse if married filing jointly) were 65 or older and/or legally blind, the exemption allowance is an additional $1000. 

If someone else can claim you as a dependent and your Illinois base income is $2,325 or less, your exemption allowance is $2,325. If income is greater than $2,325 and you can be claimed as a dependent, your exemption allowance is $0.

@pc5000-hotmail-c

[pc5000-hotmail-c]

Yes, that's the law. Unfortunately TurboTax didn't apply state exemption to my tax return and calculated that I owe taxes . Luckily,  I have tried a different tax reporting software and  I'm getting a refund. By Not using TurboTax I saved hundreds of dollars. TurboTax looks pretty but it is not good at calculating taxes. Makes you wonder how many users lost money by using TurboTax?

[KrisD15]

It would depend on whether you are a dependent or not. 

Perhaps you selected  "Someone else can claim me" in the TurboTax program. That would indicate that you are a dependent. 

According to the State of Illinois:

• "For tax year beginning January 1, 2021, it is $2,375 per exemption.  If someone else can claim you as a dependent and your Illinois base income is $2,375 or less, your exemption allowance is $2,375. If income is greater than $2,375, your exemption allowance is 0."

Illinois Link

[pc5000-hotmail-c]

Thank you for your answer, I have checked it again and I have NOT selected that someone else can claim me as dependent. My federal return is correct, but using TurboTax for state is wrong and using it can cause you to lose hundreds of dollars.

[BillM223]

I do not know if this applies to you, but Illinois also says:

"Note: For tax years beginning on or after January 1, 2017, the Illinois exemption allowance is not allowed if a taxpayer’s federal adjusted gross income (AGI) exceeds $500,000 for returns with a federal filing status of married filing jointly, or $250,000 for all other returns."

See Illinois page on exemptions.

[pc5000-hotmail-c]

I wish it applied to me..

[ErnieS0]

Please clarify your question. What state and what tax exemptions do you have a question about?

[WilmaandRick]

Ernie,

My wife and I now live in Delaware and filed non-resident returns last year (2020 tax year).

This tax year (2021) we received a 1099-G from Maryland and Virginia so the refund amounts from both of these states were entered as income on our Federal return.

The TurboTax program says that we have to file non-resident in both Virginia and Maryland AGAIN.

When does this cycle end?

[WilmaandRick]

We received 1099-G forms from the tax year 2020 and entered this into the TurboTax Premier program and the program said we have to file non-resident in both Virginia and Maryland again.

Since we are Delaware residents, why do we have to continually file in the 2 other states?

Is it because of the 1099-G forms received from Virginia and Maryland?

[ErnieS0]

States do not tax their own refunds @WilmaandRick. If that's your only income for each of those states, then you will have $0 income for Maryland and Virginia after the subtraction and you will owe no tax.

You may have to file because state filing requirements consider your total income. However, if you owe no tax there is no non-filing penalty. All filing and nonpayment penalties are based on unpaid tax. If you owe no tax, there is no penalty or interest.