Instructions For Schedule CR - Credit for Taxes Paid To Other States
See the general instructions for credit for tax paid to another state on page 10. Below is an example when all of the income in the other state is not taxed on the Alabama return. In such situations, you may not be entitled to the full amount of tax paid to the other state. The following example can be used by changing the figures to fit your income and/or loss.
The taxpayer is a single filing resident of Alabama and has income from wages of $66,666.67. The taxpayer has gambling winnings of $100,000.00. The taxpayer has substantiated gambling losses of $50,000.00 of which only $30,000.00 is allowed as a deduction on the other state’s return.
Use this Worksheet to compute the tax on the income from the other state under Alabama Tax Law.
(1) Income from Other State . . . . . . ...... . . . $100,000.00 (2) All Alabama allowed Expenses (Losses)
(3) Addlines2a,2b,and2c ................................$ 50,000.00 (4) Income from other state under Alabama (a) If the result is zero or less STOP here, you are not due a credit against your Alabama income tax. (b) If there is no entry on line 2 above, the “taxable income” from the other state return should be entered on Schedule CR, line 1. (c) If there is an entry on line 2 above, compute the Alabama tax on the amount on line 4 using the tax tables on pages 2530. In this example the tax credit would be $2,463.00. See schedule CR, line 5 for additional instructions. |
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