West Virginia Residents - Subject to certain limitations, a West Virginia resident may be eligible to claim a credit for income taxes paid to another state. The purpose of this credit is to prevent the same income received from being taxed in both states.
West Virginia Part-Year Residents - Part-year residents may claim credit for taxes paid to another state during their period of West Virginia residency.
NONRESIDENTS are not entitled to a credit under any circumstances.
Limitations: The amount of the credit is subject to the following limitations:
- The credit cannot exceed the amount of tax payable to the other state on income also subject to West Virginia Tax. This is the amount of income tax computed on the nonresident return filed with the other state.
- The credit cannot exceed the ratio of the West Virginia tax determined by dividing the amount of the taxpayer's West Virginia income subject to tax in another state by the total amount of the taxpayer's West Virginia income.
- The credit cannot reduce the West Virginia amount of tax due less than what would have been due if the income subject to tax by the other state was removed from the taxpayer's West Virginia income.
You must maintain a copy of the other state tax return in your files. This credit is not allowed for income tax imposed by a city, township, borough, or any political subdivision of a state or any other country. Local or municipal fees cannot be claimed. A separate form must be completed for each state for which you are claiming the credit.
Exception: Reciprocal States - Due to existing reciprocal agreements, West Virginia residents cannot claim the credit if the credit claimed is for state income taxes paid on wage and salary or unemployment compensation income earned in Kentucky, Maryland, Ohio, Pennsylvania, or Virginia. However, taxes paid on income derived from sources other than wage and salary or unemployment compensation income is permitted as a credit.
The credit for taxes paid to another state is automatically calculated in your account when you add a Nonresident return to your already created Resident West Virginia return. If you qualify for the reciprocal agreement, you will need to remove the automatic calculation. Complete instructions for filing the West Virginia resident and the other state nonresident returns for the reciprocal states can be found within our Knowledgebase for each state.