Step-by-Step Guide
Step 1: Confirm Eligibility for Other State Credit ✅
Ensure the taxpayer is a full-year resident of Iowa and has earned income as a non-resident in Nebraska.
Verify that the taxpayer paid taxes to Nebraska on the income earned while residing in Iowa.
Step 2: Access State Tax Section in TaxWise 🖥️
Log in to TaxWise Online – Access your TaxWise account and open the relevant tax return.
Click the + icon to add the form IA 130 Pg 1-IA Out-of-State Credit Pg 1
Click on the blank cell and type NE.
Scroll down then accomplish the section below:
The income earned in Nebraska while the taxpayer was a non-resident.
Next, select the form NE 1040 Pg 1 item no. 5
The amount of state tax paid to Nebraska.
The, navigate to form IA 130 Pg 1 (NE). Scroll to the lowest bottom and make sure that it's all filled out especially item no.20.
Go back to the form NE 1040 Pg 1 then go to item no.15 — make sure there's a value in it.
Lastly, return to form IA 130 Pg 1 (NE) and to item no.20 to verify the amount.
TaxWise will calculate the Other State Credit based on the income earned in Nebraska and the taxes paid to Nebraska.
Ensure the credit is correctly reflected in the Iowa return based on the Nebraska tax payment.
Step 3: Double Check for Accuracy ✅
Review the details of both the Iowa and Nebraska information to ensure all income and tax payment amounts are correct.
Confirm the Other State Credit is accurately applied to reduce the Iowa state tax liability.
Step 4: Submit the Return 📤
Once all information is confirmed and reviewed, submit the Iowa return with the Other State Credit applied.
Attach any required documents, such as proof of Nebraska taxes paid.
By following these steps, you’ll ensure the Other State Credit is properly claimed in Iowa for income earned as a non-resident in Nebraska, reducing your overall state tax liability in TaxWise. 🚀