Other State Tax Credit for a Full Year Resident in Lacerte

Below you will find information on how to calculate the other state tax credit for a full year resident return:

The program automatically calculates the credit for taxes paid to other states only when you select the Full Year Resident check box in Screen 1, Client Information. Generally, the resident state grants a credit for taxes paid to the nonresident state(s). In situations where returns are being prepared for states with a reverse credit agreement (CA, AZ, OR, IN, VA), the credit is granted by the nonresident state(s). The program handles both of these situations. 

Overrides are available in Screen 52, Other State Tax Credit for each state.

The program does not automatically calculate the credit for taxes paid to other states when you leave the Full Year Resident check box blank. The program generates a combination of part-year or nonresident returns. For these returns, you must enter additional information in the Other State Tax Credit screen to generate the credit. For instructions on how to enter this in the program, please see here.

It is important to note that some states have reciprocal agreements, reverse reciprocal agreements or agreements between states that allow taxpayers to earn income in a nonresident state without paying taxes on that income to the nonresident state. If you have a state with a reciprocal agreement in your multi-state return, the program calculates the correct credit or the excludable income under the agreements. (see individual state instructions for details)