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I worked in several states in 2024, my residency was Alabama. I only made a little over 1000 in AL, so why is AL saying I owe 500+? I paid state taxes in other states.

If my status says 'pending' can I not amend my state taxes?
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1 Reply
DianeW777
Expert Alumni

I worked in several states in 2024, my residency was Alabama. I only made a little over 1000 in AL, so why is AL saying I owe 500+? I paid state taxes in other states.

Here is the reason you may owe tax to your resident state. Your resident state requires all worldwide income to be taxed. However they will give you a credit for taxes paid to another state on the same income. If you didn't take advantage of this credit, it's reasonable to have a large balance due. See the details below.

 

You must wait until the return is either accepted or rejected before you amend. Accepted would need an amendment and rejected would mean you can change your return and resubmit it.

 

State Returns - Your resident state requires you to include all worldwide income. Assume both states require income tax returns to be filed: 

  1. Report the income on each state return that is from the nonresident state
  2. Report it on your resident state and receive credit for taxes paid to another state.

Credit for taxes paid to another state is allowed by a resident state when the same income is being taxed to another state.  Your resident state does not want you to pay tax twice on the same income. The credit that is allowed will be the lesser of:

  1. the tax liability actually charged by the nonresident state, OR
  2. the tax liability that would have been charged by your resident state

In most cases complete your nonresident state first.

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