Reciprical agreement is only for wages I believe. If they had income in Kentucky from real estate, they pay tax to Kentucky and get a credit on Illinois although I don’t know if it’s the full credit. Seems to me I did one not too long ago, where Illinois only gave them a partial credit
Debbie Wilson
From: taxchat@yahoogroups
Sent: Saturday, October 11, 2008 4:04 PM
To: taxchat@yahoogroups
Subject: Re: [taxchat] KY Non-Resident & Taxes
thats the reference they gave me too, but thats not it. tp has a K1 from KY for a real estate investment that had $18,000 cap gn, $275 int, & $2000 loss on rental real estate. on the PTE-WH (KY version of a withholding on net distr share income for pass through entities), they show $16,275 net distr share inc subject to w/holding; tax before credit of $977, & then the same on line for Ky inc tax w/held. in calculating the KY return, he has a refund of $350, so even the net $677 should show up on the IL-CR somewhere i would think. or am i suppose to look at it "almost" like a W2, forget the reciprocal, & just claim the $977 as state tax paid? im at a loss on this.
lynne
Mel Wolfson wrote:
I took a quick look at the instructions for the IL-CR. I think that there is a reciporcal agreement between the two states that is preventing you from taking the credit. You have to file a return for KY and claim the refund there.
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