When you are a full-year resident of any state, generally you are required to include on that return all income earned regardless of the state you earned it in. If you also have income earned in another state where you did not live (your nonresident state), you are usually allowed a credit on your resident state return for taxes paid to that other state (or other “jurisdiction” as some states term it) if the income was actually taxed by both of the states.

There are 43 states that assess income tax and each has a separate set of instructions on how to calculate the income taxed by both states and how to calculate the tax paid to the nonresident state. For this reason, the TaxAct program is unable to calculate the two amounts automatically, and therefore the user must manually perform the calculations and enter them into the appropriate sections of the state returns. The State Form Instructions will provide guidance on how to perform the calculations.

Below are general instructions on calculating those amounts for any state:

1. Complete and print the nonresident return.
   • Note that you cannot print a return until you have paid for it. See the FAQ Paying TaxAct Product Fees for details.
2. Access the State Q&A for the resident return.
3. Select Credits and then select Other State Tax Credit (or similar wording, such as Taxes paid to another jurisdiction).
4. Use the printed nonresident state to complete the interview process. You may need to review the state’s form instructions for more information as to what amounts must be entered to ensure an accurate calculation.
5. Once the amounts are entered, print the resident return. The credit calculation will be included.

Although not all states require it, you should attach a copy of the nonresident return when claiming a credit for taxes paid on your resident return. If you choose to e-file the return, just keep a copy of the nonresident return with your tax records. Your resident state agency may request a copy if verification is needed.

FAQ: 21622