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Amended return

I get a credit on my resident state tax for taxes paid to the nonresident state where I worked. The credit is the lesser of the actual tax paid to the nonresident state and the tax that would be due to the resident state based on the amount of earnings in the nonresident state. The nonresident tax rate is more than twice the resident tax rate.

I realized that I made a mistake in my last two nonresident returns that caused me to overpay taxes. I can easily amend those nonresident returns to recoup the money, but am wondering if I would then have to file amended resident returns. The thing is that changing the amount of taxes paid to the nonresident state will not change the amount due to the resident state as the corrected nonresident tax paid is still greater than what the resident tax would be on the amount earned.

So am I obligated to file an amended resident state return if there would be no change in the amount of tax due?

Reply to
Barry R
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You may not be _obligated_ to file an amended return, but if you don't (at least, in some states), the statute of limitations on the return you might have amended remains open indefinitely.

It's probably a good idea to amend, even if there is no change.

-- Arthur L. Rubin CRTP, AFSC in Brea, CA

Reply to
Arthur Rubin

Can you please clarify - statute of limitations for what? And if I'm not obligated to file an amended resident return, how would the resident state have any knowledge that the nonresident state gave me a refund? I'm not trying to evade an obligation here or do something unethical or illegal, just trying to avoid the paperwork hassle of amending returns when nothing will change.

Reply to
Barry R

States have been known to share information before; after all, you didn't have to attach your non-resident return to your resident return.

As for the statute of limitations: for example, California's statute of limitations is 4 years; however, if you file an amended Federal return or if the IRS finds an error which _might_ increase the state tax due, and you do not file an amended return with California within 6 months of the final Federal determination, then that state return remains open indefinitely. I don't know if that would apply to changes in other state tax returns, but it is not impossible. As you have not specified either your resident state or non-resident state, it would be hard to research.

-- Arthur L. Rubin CRTP, AFSP in Brea, CA

Reply to
Arthur Rubin

I do have to attach my non-resident return to my resident return. So they may not be sharing information.

Your scenario involves a change that would increase the resident state tax due, which is not the case here. So I'm thinking to go ahead and amend the non-resident return and leave the already filed resident return as is.

Reply to
Barry R

Does the ENTIRE return remain open indefinitely, or just the portion subject to the error which _might_ increase the state tax due?

Reply to
taxed and spent

In California, it's the entire return....

-- Arthur L. Rubin CRTP, AFSP in Brea, CA

Reply to
Arthur Rubin

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