Nonresident State Tax Credit Does Not Display in Resident State Return
If you need to prepare more than one state return, you may notice that your resident state return isn't giving you a credit for the taxes you paid to the nonresident state(s).
Explanation and Solution
The state where you live (resident state) will tax all your income and will give a credit for taxes paid to the non-resident state on the resident state return so you are not double taxed.
In order to receive a non-resident state tax credit follow these steps:
- Enter your non-resident state information first.
- Enter your resident state information next.
- Make sure you choose the resident state long form even if the short form EZ is automatically chosen for you.
- On your resident return "Other State Taxes Summary" your state credit will come up.
If you created your resident state return before you began work on your nonresident state return, TurboTax will not pull over any tax amounts (credits) from your nonexistent nonresident state return.
To resolve this issue, you will need to remove your resident state return and then create a new resident state return. (Doing this has the same effect as entering your non-resident state first, which is how the returns should be entered.)
