Worked in Multiple Cities, Credit for Taxes Paid

[HSAQuestions]

I have a question about which numbers I need to use in order to correctly ascertain how much credit I should be getting for taxes already paid. I was a nonresident worker for part of the year in a city. I had biweekly local taxes taken out of my paycheck for this nonresident city. Now, I'd like to get credit for those taxes on my resident city taxes. I'm a bit confused by the questions and the information on my tax return.

Example W2 information from this employer - it included a TOTAL City subsection as well as subsections for the two different citites:

Nonresident state wages - $4000, Nonresident local wages - $3500. (I'm not sure why these are not the same, but called my employer and they said the numbers are correct). Nonresident taxes - $20. Income tax exemption amount of $400

Resident state wages - $4000, Resident local wages - $4000. Resident taxes - $40 ( resident taxes for the city I live in are higher than the nonresident taxes for the city I work in). 

These are the questions I need to answer for the credit:

1) Enter the income that's taxable in the other city and also taxable in your resident city = (I'm not sure if the answer should be $4000 or $3500)

2) Enter the exemption amount claimed on your other city return = $400

3) Enter your total tax amount from your other city return that's a result of income being taxed by both cities = ? (I think this would be $20 right)

[JamesG1 · Accepted solution]

It would be so useful to know what state or local taxing authority the credit for local taxes paid is being generated.

All of these taxes withheld are reported in boxes 18 through 20 of a W-2.  Correct?

(1) The number that is generally used is the Local wages in box 18 for the same line as the Local income tax withheld.  Without seeing the W-2, it is unclear why box 1 income would report $4,000 and box 18 would report $3,500.

(2) This appears to be correct.

(3) Generally you report the local resident taxes paid to compare against the local nonresident taxes paid to make sure that you paid at least as much nonresident as resident taxes paid.  The credit will not be more than what was paid in resident taxes paid.  I would think you would report the $40.  It appears that the credit generated should be $20.

Hope that this helps.