Credit for Other State Taxes
Last week, we had a client call to ask if it is normal to owe several thousand dollars on their tax return in both Kansas and Missouri. The answer? No, it is not normal. There are some situations where this happens, however, if you are only a W-2 employee, you shouldn’t owe a lot of tax in both states. We see this situation a lot when we have individuals who work in one state and live in another. Most of the time, in these cases, there is an error on the input of the tax return. In do-it-yourself software like Turbo Tax, the credit for other state taxes is often left off. If you don’t know where to find it, you will miss it.
Most states give you credits for taxes you paid on income in both states. This avoids you getting taxed twice on the same income. To claim this credit, you will need to fill out the Credit for Other State Taxes worksheet within your resident state return. On this form, they will ask for the income that was taxed in both states, as well as the tax you paid associated with those wages. When this form is filled out correctly, the tax in your resident state should be reduced by the credit you can claim. This will directly reduce the amount of tax you owe.
If you think that you are paying too much in both states, give us a call at 913.748.4880. We will look and see if you can amend your return!