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Megan C
Megan C, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 14059
Experience:  Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level
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Hello. I have income as a limited partner in five states where

Resolved Question:

Hello. I have income as a limited partner in five states where I as a non-resident qualify for the partnership's state composite returns (i.e., no other income from those states). The partnership sent me a copy of a K-1 or "K-1 equivalent" for each of those states: CO, IL, KS, NJ, SC. My question: can I take a credit on my California Form 540 for taxes paid to those states? Thank you.
Submitted: 1 year ago.
Category: Tax
Expert:  Megan C replied 1 year ago.

Megan C :

Hello! I am a CPA here to assist you with your tax questions. My goal is to provide you with excellent service today.

Megan C :

How are you today?

Megan C :

Yes, you can claim credit in California for taxes paid to other states.

Megan C :

This eliminates so-called "double taxation"

Customer:

Okay. Can I carry this credit forward if I don't use it in the current year?

Megan C :

No, it would not carry forward. You use it in the current year only

Customer:

Okay, thank you. Now, in the documentation they sent me, it's hard to tell what they paid on my behalf to the states, as follows:

Megan C :

Okay

Customer:

CO: they just show a "colorado source income " of $975. Nothing about withholding.

Megan C :

If they don't show withholding then you would file a return and pay the tax

Customer:

I don't think so, because they told me that joining the composite return relieves me of the obligation to file a state return.

Customer:

That's why I did it. Cheaper than paying our tax preparer.

Megan C :

Okay then no return is necessary

Customer:

Illinois shows $260 "composite return payment" on $5,196 income apportioned to Illinois. I'm thinking this is tax.

Megan C :

But you do get credit for any state taxes and if you don't use it it doesn't carry forward

Megan C :

Yes, that sounds like tax

Customer:

Kansas shows a tax of $1 identified as "taxes on or measured by income or fees or payment in lieu of income taxes"

Megan C :

Okay

Customer:

But then they include a Form K-19 which shows $27 "Total Kansas Tax Withheld".

Customer:

New Jersey's form says $41 is "nonresident Partner's share of NH Tax"

Customer:

So I'm thinking I will add the following numbers:

Megan C :

Okay then you would take a credit for all of these on your CA return

Customer:

Colorado $0 (I guess, maybe I need to check this. Does CO have an income tax?

Megan C :

Yes, they do have income tax but if there's none reflected on your K-1

Megan C :

then you didn't pay any

Customer:

oops forgot South Carolina--$70 "Withholding tax for nonresident partner"

Megan C :

Yes add that in to

Megan C :

too

Customer:

Okay, I think I've got it! Thank you so much for your help!

Megan C :

You're welcome

Megan C, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 14059
Experience: Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level
Megan C and 4 other Tax Specialists are ready to help you
Expert:  Megan C replied 1 year ago.
Thanks Janine, for your positive rating. Please come back and visit Megan C any time you have a tax question. It was a pleasure working with you today.

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