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granddog
New Member

Question regarding IL tax credit

In 2022 I held a NY based job for the entirety of the year. From Jan to end of July I lived in IL, telecommuted to my NY job, and my employer withheld IL tax. My lease ended so I then moved to NY and lived there from August to end of December. During this time my employer stopped withholding IL tax and began withholding NY tax.

 

As I understand it, NY taxes all income earned regardless of whether you telecommuted or physically worked in the office as long as the employer is NY based correct? This means I will essentially be double taxed on the income I earned while telecommuting from IL as I currently see it. However, and someone please correct me if I am wrong, I believe that the form I am looking for is schedule CR? As I see it, I can use this form to claim tax credit for this portion of my income that I earned in while living in IL right? This essentially means I will get all of the IL withheld tax back to which I can then use to pay off my NY balance. At least I am hoping that can be the case. I would appreciate any clarifications/tips and pardon me if I left out key information. Please advise if so and forgive me if this is the wrong forum to post my inquiry in. 

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1 Reply
BrittanyS
Expert Alumni

Question regarding IL tax credit

Yes, according to the NY Department of Taxation, "You are entitled to claim this nonrefundable credit if: the pass-through entity tax was paid on income sourced to the other state, local government within another state, or the District of Columbia; and. the pass-through entity tax was paid on income included in your New York adjusted gross income." 

 

You can claim the credit for taxes paid to another state by following these steps:

 

  1. Complete Non-resident state first
  2. Start NY Return
  3. Continue through return until you get to "Take a look at New York credits and taxes", Scroll down to Credit for Taxes Paid
  4. Click Start next to Taxes paid to Another State

 

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