The spouse mistakenly withheld taxes to Wisconsin, and they reside in Illinois.
IL and WI have a reciprocal agreement.
Based on my understanding, there is a way to make this only an Illinois state return, or at least ensure the reciprocal agreement is being recognized in ProSeries.
No income allocated to WI, all income allocated to IL
Refund of withholding to WI.
Let's pretend that the income was indeed earned in WI and it wasn't an error - how would the software handle the reciprocity? I was always under the impression that reciprocity meant the non-resident return did not need to be filed.
Reciprocity means the wages are only taxable in the resident state. No Wisconsin return is required. But your client might like to have the Wisconsin tax withheld refunded. Filing the nonresident return to get the refund is optional.
Got it - so technically when they set up their payroll, they would need to know that their is a reciprocal agreement, and the W-2 would not need to withhold to WI.
If they don't do that, it is automatic for a NR return to get the refund.
Personally I'd let them withhold the WI tax and file that one first and wait for refund before you file Illinois. Unless client will make estimated tax payments for the no withholding on Wisconsin. But thats a judgement call.
I typically file WI first before I file Illinois. But sometimes when client is late, he/she has to foot the bill.
You have clicked a link to a site outside of the Intuit Accountants Community. By clicking "Continue", you will leave the community and be taken to that site instead.
