Hi dwd4204, Cocotheape, LenaH, kprater08 and bama_88:
There have been changes in tax legislation in 2020, which may have an impact on tax calculations filed early. When the program is updated (next time you update a desktop version or sign back into an online account), you will see these numbers adjusted to reflect new legislation. Without viewing a diagnostic of your individual situation, a clear or complete analysis is pending.
To provide some guidance on how to determine if your schedule CR is properly calculating the credit, here is some guidance, using AL as your resident state and MS as your state of employment.
When you answer the interview series of questions, in sequence, the software will properly calculate your taxes and flow through to your states. You will need to complete your non-resident state, first, in order for your resident state to properly calculate your taxes. If your software has not been updated with the updated tax legislation and you have not cleared cache and cookies, your forms may not properly transfer your values. Your internet speed may also have an impact.
Simple example assuming Married Filing Jointly with only W-2 income
FORM 1040
Federal Return AGI (adjusted gross income), line 11 - $ amount A (W-2 box 1)
Federal Return Taxable Income, line 15 - $ amount B
MS state - Form 80-205 (non-resident)
MS AGI line 16 - $ amount C (this should correlate with income earned in MS state)
MS taxable income, line 19 - $ amount D
MS tax, line 20 - $ amount MIT
AL state - Form 40 (resident)
AL AGI, line 10 - $ amount E (W-2 box 5)
AL Taxable Income, line 16 - $ amount F
AL line 17 - $ amount G relates to calculation from tax table (5% less $80)
AL line 18 - $ amount H relates to net AL state tax due, based on schedule OC calculation, which adjusts AL state tax due from tax paid to MS (schedule CR). Line 29 ($1,363 – amount N) adjusts for state tax paid to AL (in this example, from W-2).
AL Schedule OC
Section A – $ amount G
Section B - Current Year Credits - Part A
A1 - MS line 19, $ amount D
A2 - AL AGI line 10, $ amount E
A3 - amount D / amount E = % J
A4 - % J x amount G = $ amount K
A5 - $ amount MIT
A6 - the lower of A4 and A5 - $ amount K (in this example)
AL Schedule CR - Credit for Taxes Paid to Other States
State 1 - MS
A - MS taxable income - $ amount D
B - Tax imposed by MS - $ amount MIT
C - MS AGI - $ amount C
Part 1 (state 1 - MS)
1 - MS taxable income - $ amount D
2 - Portion of MS taxable income included in AL AGI - $ amount D
(if you are resident of AL state the whole year, 1 and 2 will be the same amount)
3 - AL calculation of tax due to MS - $ amount L
4 - MS tax due - $ amount MIT
5 - smaller of 3 and 4 - $ amount MIT (in this example)
Part 6
26 - AL AGI attributed to (earned in) other states (MS) - $ amount D (in this example)
27 - total credits - $ amount MIT (in this example)
SUMMARY
AL TAX DUE: AL Form 40 line 18 (($H) and line 21, in this example) net tax due should agree to AL Schedule OC, Section E, line E5 ($H).
AL TAX LESS MS CREDITS: AL Schedule OC Section A ($G) has been adjusted for the allowable MS credits in Section B ($K); refer again to Section E ($H).
AL NET TAX DUE: AL Form 40 line 29 tax due ($ N) is the difference between line 21 ($H) and line 28 (AL payments per W-2 box 17).
Based on entering a sample in turbotax desktop home & business version, the taxes are properly calculating.
TurboTax does not review specific calculations without a diagnostic, as each tax situation is unique and some calculations have complex underlying calculations which require additional analysis. Share a diagnostic with Turbo Tax Live, if you need further analysis.
