What is the credit for taxes paid to another state?
If you paid taxes to Alabama and another state for the same income you may qualify for a credit to avoid double taxation. For example, you were self-employed and your business made $20,000 which is taxable to both Alabama and Mississippi.
This credit helps to avoid being taxed twice on the same income and is only available to legal residents of Alabama who file Form 40. It applies when your income from sources outside Alabama is taxed by both Alabama and another state (or U.S. territory) in the same tax year. Part-year residents may claim this credit only if their returns filed with Alabama and the other state cover the same time periods.
You must complete Schedule CR and you must attach a copy of the other state's return (or W-2G's if you are claiming the credit for gambling winnings from a state that does not require a return). You can complete Schedule CR by going through the Alabama interview process on our software.
This credit helps to avoid being taxed twice on the same income and is only available to legal residents of Alabama who file Form 40. It applies when your income from sources outside Alabama is taxed by both Alabama and another state (or U.S. territory) in the same tax year. Part-year residents may claim this credit only if their returns filed with Alabama and the other state cover the same time periods.
You must complete Schedule CR and you must attach a copy of the other state's return (or W-2G's if you are claiming the credit for gambling winnings from a state that does not require a return). You can complete Schedule CR by going through the Alabama interview process on our software.
