How can I fix my AL State return after receiving Reject Code AL40-50? I do not see what is wrong.

The error means Al wages plus out of state wages should equal box 16 on w2. Double check your w2 entry that AL plus VA add up to the total wages. Also, check that your w2 in the program is showing VA with the VA state id.

Side note: Since the VA had tax withheld, your AL return should show a credit for tax paid to VA. If not, it needs to be added. Your resident state taxes all income but gives a credit for income taxed by another state.  Please carefully follow these directions to prepare the states in a special order. You may need to delete both states and begin again.

1. First, prepare your non-resident VA return. This creates your tax liability for the non-resident state. How do I file a nonresident state return?
2. Then prepare your resident state AL return and it will generate a credit for your income already being taxed in the non-resident state.
3. The credit will be the lower of the state tax liabilities on the same income. You may owe your resident state, if they have a higher tax rate.

It isn't possible for the program to create a credit before it knows the liability. Your returns may be wrong if you do not prepare the states in this order.