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Mikes20222022
Returning Member

the state tax credit from Illinois did not show up correctly in Turbotax

live in Indiana but work at Illinois, showed $3000 tax to Illinois after first finished nonresident tax for Illinois, then filled Indiana tax as resident, the state tax credit from Illinois did not show up correctly in Turbotax, only show $1795, while Indiana State tax is $1875, so I owe Indiana tax. while per my understanding of Indiana IT-40, the credit should enough cover the Indiana tax. Also after generated Indiana IT 40 form and schedule, it seems the income to calculated the credit by turbo tax is based on the income after all deductions in Illinois instead of income from Illinois solely.

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1 Reply
JamesG1
Employee Tax Expert

the state tax credit from Illinois did not show up correctly in Turbotax

You are a resident of Indiana and a nonresident of Illinois.  On the Indiana income tax return, you are eligible for a credit for taxes paid to another state.  

 

The credit is calculated on Group A Worksheet on page 37 of the Indiana IT-40 Booklet.  The Indiana IT-40 Booklet may be found at this website.

 

The lesser of the amounts on A, B or C is your allowable credit for taxes paid to other states.  Since you are allowed a credit of $1,795.  I presume that option A is $3,000 and option C is $1,875.  The credit figure was computed from option B which states:

 

   Multiply the amount of income from the other state (that is subject to Indiana tax) by 3% (.03)

 

We are not able to see the dollar amounts on the two tax returns.  Please provide the proper income, deductions and withholding numbers that you calculate.

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