How we can help you avoid double-taxation
There are four main methods to avoid double-taxation on the state portion of your return. Contact us at the form below and we can complete this for you.
Allocate between the states
If the situation is that you moved during the year, you can allocate income to each state that you moved. Issues arise, however, if one state reports disproportionally more income than they should, or if the employer simply did not withhold enough or altogether for another state.
Credit for taxes paid to other states
If the income being reported on your W2 was already taxed by another state, causing a double-taxation scenario, most states will allow you to take a “credit for taxes paid to other states.” This is highly technical work, however, our senior team specializes in this and will assist. Just contact us below.
State reciprocity agreements
Certain states have reciprocity agreements, such as DC and VA, where you only have to file in the resident state. Other examples of states that have agreements with neighboring states include Arizona, Illinois, Indiana, and Maryland.
Reverse Credit States
A great example of this is CA – if you are living in CA but working in OR, rather than paying taxes to the income source state (as my example above with SC and NC), you would only pay tax in your residence state
A note about city taxes
Cities such as Detroit, New York, and Philadelphia tax you based on your residence, regardless of where you earned your income, and credits for taxes paid to other states generally do not apply. These are unique situations & you can contact us if this applies to you to know more.
If you need assistance with any multi-state matters, please use the contact form below and we will respond normally within a few hours.
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Taxation of Rental Properties
