Need help with CA Sch S. Part II of Sch S Other State Tax Smart Wks Line A (inc. tax liab paid) is $0. Client has income tax liab from other states (GA). Why Line A $0 ?

[alexa]

California Sch S Other State Tax Computation Smart Worksheet Line A list $0 income tax liability paid. California resident client files GA nonresident return and has GA income tax liability. This GA income tax liability was satisfied by GA low income housing credit. Is the reason why Line A lists $0 because the GA liability was not paid to GA (used GA low income housing credit) or is this just an error in the system?

[IRonMaN · Accepted solution]

I don't do GA or CA, but if you didn't have any tax liability in the  nonresident state, you aren't going to have a credit in the resident state.

[alexa]

They did have a tax liability in GA but it was satisfied by tax credits not by an actual payment to the GA Dept. of Revenue.

[IRonMaN]

But the credit reduced the liability to zero, so you didn't have any GA tax.

[alexa]

The client has actually bought GA low income housing credit and that satisfied the GA tax liabilty

[alexa]

Ok. so you are saying that the GA tax liability after the credit is $0 therefore the client would not get a CA tax credit because they paid $0 GA taxes.

[IRonMaN]

Yup.