Other state tax credit calculation

Technical topics regarding tax preparation.
#1
kathyt  
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Lake Charles, LA
I have a client that was a resident of WV from Jan - July; then he moved to AL and was a resident of AL from August- December.
He did not work in either state, he worked in Louisiana the entire year. So I am filing a LA return for all of the income (only income was W-2). I am also filing a WV return to report the income earned in LA while a resident of WV; and an AL return to report the income earned in LA while a resident of AL.

I have to override things in Lacerte because it will only calculate the other state tax credit if you are a full year resident of your resident state (I called Lacerte on this and they verified that). So my question is, how do I calculate the amount of the credit to the other states, is it by the number of days the person was a resident or by the income earned?

The total income is $100,000; all taxable to LA as it was all earned in LA. $80,000 was earned from Jan-July while a resident of WV; the other $20,000 from August - December earned while a resident of AL. LA tax is $3,000. So for the credit to WV, would it be 80,000/100,000, 80% of the $3,000; or would it be 211 days/365 days, 58% of the $3,000? I'm thinking the income but just wanted to make sure if anyone has any thoughts. Tried to look on both the WV and AL websites to find out but couldn't find the answer.
 

#2
makbo  
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kathyt wrote:So my question is, how do I calculate the amount of the credit to the other states, is it by the number of days the person was a resident or by the income earned?


FWIW, California says part-year residents, for purposes of the other state tax credit, should follow the resident rules for the part of the year they were resident, and the non-resident rules for the part of the year they were a non-resident. If this applies to your states, then it would be income during each of the periods in question, not days.
 

#3
Doug M  
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Oregon
183 day rule discussed in the WV tax booklet. Page 15 indicates he could be considered a resident based upon the months you described. (as opposed to part-time resident)
 


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