Donations make refund smaller.

Forum|Forum|3 years ago
November 17, 2022
1 reply
8 views

We live in Illinois and work in both Illinois and Missouri. After entering our (large) donations, our federal refund gets larger, but our Illinois refund gets smaller, or we end up owing. Why is this?

RSUMan

Level 6

Illinois and Missouri are not reciprocal states for the purpose of filing state income taxes. Therefore, I assume you are filing a MO return also and allocating income. IL has special rules relating to Scholarship Granting Organizations and also me be allocating itemized deductions based on splitting income between MO and IL. These allocations can create anomalous tax results.

I recommend that you call into TurboTax Live and get a CPA, Attorney, or Enrolled Agent to pull a diagnostic copy of the tax returns and trace through the math of the Illinois return. We need to look at the specific allocations in the IL return to figure out why the results are occurring.