How to claim the Alabama credit for taxes paid to another state?

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 Alabama return if you pay taxes to both Alabama and another state.

If you have a Part Year return added to your account, you must complete the requested information within the Alabama state Credits section. Please refer to the PDF copy of 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 and the same income is taxes in both states.

Alabama may request a copy of the other state's tax return before processing the return.  Please see the Alabama Department of Revenue website for more information.

Program Entry 

If you have income that qualifies for the credit for taxes paid to another state, and you are a part-year resident you must manually add this into the program. You can do this by following this path:

1. Click State on the left side menu
2. Edit Alabama return
3. Credits
4. Credits for Taxes Paid to Another State
5. Add Credit
6. Fill in the required information

Please note: You will need to follow these steps for each state you need to add.