18531: IL - Credit for Taxes Paid to Another State

Line 51, "...total amount of income tax paid to other states on Illinois base income," of Illinois Schedule CR is calculated ​automatically based on the other state returns generated in View/Print mode. The total amount of taxes paid to other states flows to line 51 and is used to calculate the credit allowed. Per the instructions, "To qualify for this credit, a tax must be deductible as state and local income taxes paid on your federal Schedule A, Itemized Deductions, whether or not you actually claimed the deduction." Illinois may request proof of the other state returns to support this calculation.

In some situations, you may need to make entries on IL screen CR. This screen allows you to override amounts, make selections for nonresident or part-year residents, or force Schedule CR to be printed.

Reciprocal States

Iowa, Kentucky, Michigan, and Wisconsin have a reciprocity agreement with Illinois. Taxes paid to these states are not eligible for the credit.

Local or City Taxes

If the taxpayer is subject to local or city taxes, you will need to determine if that amount should be included on IL Schedule CR. City and local taxes are not automatically carried to IL Schedule CR. To include city/local taxes paid in the IL Schedule CR calculation, use the line 51 override field on IL screen CR. You must enter the total amount of income tax paid to other states on IL-base income, not just the additional city/local amount. If you are not sure if the amount qualifies to be included, review the instructions.

A Return Note is produced when Local tax paid to another state is entered on line 19 of federal screen W2, alerting you that an entry may be needed on line 51 of IL screen CR.