Credit for taxes paid to another state

[Rainman1966]

Client lived 9 months in IN than moved to IL for the last 3 months of the year 2020.  Since his employer throughout 2020 was in IL all of his w-2 wages and state tax withheld were IL (boxes 16 & 17).  I have been able to breakout the amount of wages that need to be reflected on the IN return.  Can he take a credit on the IN return, using IN Sch G, for the taxes paid to IL.  Oddly enough the person I talked to at the IN DOR was not able to give me an answer.

[Terry53029]

These things can get involved, but usually you file for credit in resident state for taxes you paid to your non resident state. In your case the nonresident state is now your resident state. Since your client moved, you will have to file PY state return for each state, and I'm not sure you can file for a credit on a PY state return. I would check if you can file a credit on a PY state return in the two states your client has. Then try for the credit if either state lets you. I would have to do more research if I had a client in your situation.

[Rainman1966]

Thank you for your reply.  It is a questionable issue.  He made 260K in total and 195K of that was earned while an IN resident working in IL.  No question regarding the IL 1040 since IL taxes your income no matter where you live.  He owes 9936 to IN but if I can take the credit on the IN Sch G tax would drop down to 3600.  Proseries did not bring up the Sch G automatically which concerned me.

[Terry53029 · Accepted solution]

ProSeries is not the greatest for state taxes. I looked at IN dept of revenue, and it seems you can take a credit for tax paid to another state on same income, so You should just pull up IN. schedule G, as it doesn't surprise me that it doesn't  pop up automatically.