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wzlunatax
New Member

Should Turbo Tax recalculate $63 Indiana resident offset credit for 2021 $717 Illinois non-resident tax paid? How to do this? Return doesn't change. Why?

Deleting and reentering $717 doesn't change return.
11 Replies
NCperson
Level 15

Should Turbo Tax recalculate $63 Indiana resident offset credit for 2021 $717 Illinois non-resident tax paid? How to do this? Return doesn't change. Why?

the credit is not based on 'taxes paid'; it's based on the tax liability

 

on the Illinois form, what is on line IL-1040 Line 12 (which comes from the NR form Line 52)? the credit on the Indiana form should be a function of this number....

 

on the indiana form, what is on Line 12 and 13? 

Mike9241
Level 15

Should Turbo Tax recalculate $63 Indiana resident offset credit for 2021 $717 Illinois non-resident tax paid? How to do this? Return doesn't change. Why?

one other thing for Turbotax to properly compute the credit on your resident return, it is recommended that the non-resident return be completed first

NCperson
Level 15

Should Turbo Tax recalculate $63 Indiana resident offset credit for 2021 $717 Illinois non-resident tax paid? How to do this? Return doesn't change. Why?

@Mike9241 - I appreciate you often mention that and I totally agree with it in a "paper and pencil" world. 

 

But when it comes to software, all that recalculates in the background as a change is made to either state tax return.  Everything is recalculated - that is the power of computers and software.  

 

So which return is started first doesn't matter; but what matters is the correct information is entered into both state tax returns by the time the returns are completed.  

fanfare
Level 15

Should Turbo Tax recalculate $63 Indiana resident offset credit for 2021 $717 Illinois non-resident tax paid? How to do this? Return doesn't change. Why?

"But when it comes to software, all that recalculates in the background as a change is made to either state tax return. "

 

When it comes to software, it is not all bug-free and sometimes updates do not propagate.

 

TomD8
Level 15

Should Turbo Tax recalculate $63 Indiana resident offset credit for 2021 $717 Illinois non-resident tax paid? How to do this? Return doesn't change. Why?

"the credit is not based on 'taxes paid'; it's based on the tax liability"

 

Not exactly.  The amount of the Indiana "other state" credit is the lesser of (1) the tax actually paid to the other state, (2) 3.4% (the Indiana adjusted gross income tax rate) of the income from the other state that is taxed by Indiana, or (3) the tax due to Indiana.

https://www.in.gov/dor/files/reference/ib07.pdf

**Answers are correct to the best of my ability but do not constitute tax or legal advice.
NCperson
Level 15

Should Turbo Tax recalculate $63 Indiana resident offset credit for 2021 $717 Illinois non-resident tax paid? How to do this? Return doesn't change. Why?

@fanfare - can you evidence it does not propogate? 

fanfare
Level 15

Should Turbo Tax recalculate $63 Indiana resident offset credit for 2021 $717 Illinois non-resident tax paid? How to do this? Return doesn't change. Why?

By this forum (complaints by TurboTax users) and by TurboTax Support, the advice is to always do the non-resident return first.

---
Always print a copy of your completed state tax return for your records, and review it carefully before e-Filing.
You will need it if you are audited, or to amend if a TurboTax update changes your return or for any other reason,


TomD8
Level 15

Should Turbo Tax recalculate $63 Indiana resident offset credit for 2021 $717 Illinois non-resident tax paid? How to do this? Return doesn't change. Why?

The reason for doing the non-resident return first is that (with a few exceptions all involving California), the "other state credit" is always granted by the resident state.

There is no way for the TT program to "know" the amount of the credit unless the non-resident return has already been completed.

**Answers are correct to the best of my ability but do not constitute tax or legal advice.
NCperson
Level 15

Should Turbo Tax recalculate $63 Indiana resident offset credit for 2021 $717 Illinois non-resident tax paid? How to do this? Return doesn't change. Why?

@TomD8

 

From a programming standpoint, I would think that Turbo Tax (and other software providers) would 'poke yoke' the software as the average user would not otherwise know - or even follow the instructions if told -  to complete the non-residential state first.  In fact, is that stated anywhere in Turbo Tax's FAQ or other offical Turbo Tax postings on its website that order matters when completing multiple state returns? 

 

From a software design standpoint, EVERYTIME any input is changed in either the non-residential state or the residential state, the software recalculates EVERYTHING.  That ensures the output (both state tax returns) is correct.  Given how quick and cheaply that can occur,  I'd be astounded if that was not the case. 

 

Otherwise, a user could claim that a 'calculation error' under the Turbo Tax  guarentee and make TT liable for any interest and penalties that occured when the state tax return was incorrect. The user would claim that everything was input correctly and no where was he told to do the non-residential state first.  And the way Turbo Tax mitigatges this risk is to just recalulate everything every time something is changed.  

 

I'll "stand down" if there is an official Turbo Tax FAQ stating that the order the state tax return is completed matters. 

 

Hence, while in a 'pen and pencil' world, order matters, but in a software world that risk is mitigated because of the continueal recalcuation of the inputs to derive new outputs. 

 

 

TomD8
Level 15

Should Turbo Tax recalculate $63 Indiana resident offset credit for 2021 $717 Illinois non-resident tax paid? How to do this? Return doesn't change. Why?

@NCperson 

 

"In fact, is that stated anywhere in Turbo Tax's FAQ or other offical Turbo Tax postings on its website that order matters when completing multiple state returns?"

 

Yes.  See this TT help topic:

https://ttlc.intuit.com/turbotax-support/en-us/help-article/printers-printing/file-nonresident-state...

**Answers are correct to the best of my ability but do not constitute tax or legal advice.
NCperson
Level 15

Should Turbo Tax recalculate $63 Indiana resident offset credit for 2021 $717 Illinois non-resident tax paid? How to do this? Return doesn't change. Why?

thanks; I'll stand down 

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