If you are filing a Resident Alabama return and also prepare a Nonresident return for another state, the program will automatically calculate the allowable credit for you. A manual entry into the program will override the program calculations. You can enter this credit within your account by following the instructions below:
- State Section
- Credit for Taxes Paid to Another State
If you have a Part Year return added to your account, you must complete the requested information asked of you within the Alabama state program, in the Credits section. Please refer to the other return to find the tax and the taxable income amounts needed to make the manual entry.
- Part-Year residents can claim the credit only if the returns filed with other state and Alabama are for the same period.
- You must include a copy of the other state's return or W-2G's if the other state does not allow a return to be filed for gambling winnings.
If you have income from sources outside of Alabama and paid income tax to the other state, you may be eligible for a credit on your Alabama return. This credit is to prevent two states from taxing the same income. The credit is available only to residents of Alabama that file form 40 and have income earned outside Alabama that is being taxed by both Alabama and the other state.