Question

indiana county tax deduction

Forum|Forum|5 years ago
February 26, 2021
1 reply
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I work in Illinois, but live in Indiana. The county I live in assesses a county tax. I file a non resident Illinois return and want to know if I can use the tax paid in Illinois to offset county tax in Indiana. If so, where can I enter this?

AmyC

Employee

IL local tax can be a credit to your IN local tax. IL state tax will be a credit against your IN state tax. Be sure to prepare your IL nonresident return before your IN.

Regardless of where you work, Indiana will assess local taxes based on where you live (county of residence). But if you are paying local taxes in another state they will give you a credit for the amount of local tax you paid out of state (but only up to the amount of local tax you would have to pay to your Indiana county. They are claimed on Indiana Schedule 6 (taxes paid outside of Indiana). In Turbo Tax:

1. In State Taxes tab, continue to Your County of Employment Screen

2. For County of Employment, Scroll all the way to the end, and select Out Of State-Kentucky

3. Continue your Indiana Return until Take a Look at Indiana Credits and Taxes

4. Select Start on Credit for Non-Indiana Local Taxes

5. Fill in the information on the following screens (locality, what state, and how much local tax paid to state).

TurboTax will calculate the credit.

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