OLT.com Customer Service Knowledge Base
Support Center > Knowledge base> Article: Alabama Credit For Taxes Paid To Another State

Alabama Credit For Taxes Paid To Another State

Article ID: 59656 Print
Question
Alabama Credit For Taxes Paid To Another State

Answer

Credit for Taxes Paid to Another State.

You must complete Schedule CR and you must attach a copy of other state’s return or W-2G’s if the taxing state does not allow a return to be filed for gambling winnings.

The credit is provided to prevent the double taxation of income and is only available to legal residents of Alabama filing Form 40 who have income from sources outside of Alabama that is being taxed by Alabama and another state (or territory of the United States) in the same tax year. Residents of Alabama for only a part of the tax year can claim this credit only if the returns filed with Alabama and the other state cover the same periods.

If the state for which you are claiming a credit allows for credits instead of personal exemptions, call (334) 242-1170 for further information in converting this credit for Alabama purposes.

No credit is allowable when the income from sources outside of Alabama is totally offset by a corresponding deduction. However, income from sources outside of Alabama that is reported on the return and not totally offset by a corresponding deduction may result in a credit. In such cases the credit is limited to the lesser of the tax actually due to the other state or territory or the amount that would be due on the same income computed at the income tax rate in Alabama. An example of this situation is shown in the booklet in the instructions for Schedule CR on page 22. The Schedule CR calculation should not be used by a taxpayer who paid income tax to a foreign country. Taxpayers who paid taxes to a foreign country should use Part H of Schedule OC. Please see rule 810- 3-21-.03 for calculation of credit when tax was paid to a foreign country. 


related articles

Article Details
Views: 2294 Created on: Jun 15, 2013
Date updated: Jan 05, 2022
Posted in: States, Alabama

Poor
Outstanding