CA is only refunding about 1/3 of my clients CA withholding even though my client is a CA non resident. I called the AZ dept of Rev about getting the remaining withholding credited on the resident AZ return and the lady there said I need to complete a CA Sch S and attach to CA 540NR. The form look rather complicated. Anyone has experience with this form?
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AZ-Tax
Whenever I file a multi-state, the full credit (code 187) is automatic on the credit section of the 540. I'm not sure if Sch S needs to be filled out for claiming the credit on the AZ return and hopefully, someone with the know on this will jump in.
I will recheck my client list over the last couple of years to see if I can find something different for you.
Dennis -
Sch S
I looked at my client list and I have not done any full-time residents from other states that pay some CA tax. I do have two clients that moved out of CA to AZ this year and one of those may pay some CA income tax, but I'm not sure until I see the W-2 next year.
Sorry I couldn't give you an answer that would help you.
DennisComment
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Last one I did ('05) I used Form 540NR, 540 CA(NR) and Schedule S. You end up listing the dates of nonresidency on the 540 CA and the income in question on the Schedule S. I don't remember it being that bad.Originally posted by AZ-Tax View PostComment
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credit on the non resident return
HI AZ
We do use schedule S frequently - to take the credit on the CA return for income double taxed in Oregon and California.
Arizona residents also take the credit on the non-resident CA return rather than on the AZ return.
Schedule S is where you report the AGI for AZ, the income being double taxed (the CA income) and the tax paid in Arizona. These entries should be enough to calculate the credit.
I have noticed that the automatic feature of calculating the credit for tax paid in another state is a bit iffy when the credit is taken on the non-resident return - don't know what software you are using, but that may be the problem.
Hope that helps.Comment
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Thank you all for your help....
The CA - Sch S form was not as bad as I first thought. I ended up getting 100% of my clients CA withholding back though I did not enter the dates of non residency anywhere on the CA forms and my software (ProSeries) seems to accepted it w/o any errors. Though there is something may or may not be strange. My client will owe on AZ and that amount is the same whether I file a CA - Sch S or not. Am I to believe the non resident CA withholding has no bearing on the AZ resident return as long as the income pertaining to CA is included in the AZ return?
ThanksComment
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yuo are correct
Arizona is taxing 100% of his income and the credit for the double tax is taken on the CA non-resident return.
There are four states, I believe, that do it this way with each other's returns - CA, OR, AZ and ... VA?
If the double taxed income was in another state, the credit would be calculated on the AZ return - or at least that's how it works for Oregon!Comment
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One more of "those states"
The earlier post identified AZ,CA, OR, and VA as "one(s) of those states" where the credit for double taxation by another state (Other State Tax Credit) is taken in a different way than with most other states.
I have not yet gone into the instructions for 2007 nor for 2008, but IN (Indiana) has historically also been "one of those states".Comment
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Which states are "one of those states"?
I went to www.ftb.ca.gov and downloaded 07_540s.pdf, which showed that California nonresidents may be able to take credit for income taxed by California and also taxed by any of the following "states" (one of which is a U.S. possession): AZ, IN, OR, VA, or Guam. CA is also "one of those states" though not so, of course, for CA returns.Comment
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