ATX calculating credit for taxes paid to other states on MI nonresident return

[Abby Normal]

I've checked nonresident, and chosen nonresident for school district and attached the NR form, but ATX is still calculating credit for taxes paid to a second nonresident state. The taxpayer has pass-through entities in both MI and MD, but is a resident of DE.

I've read the instructions for MI 1040 and it says the credit is only for residents.

What am I missing or is this a known bug?

[Abby Normal]

Paging Michigan preparers. Anybody out there?

[jklcpa]

Sorry you haven't had any response yet.  If it's not a known issue then maybe it's something simple like a checkbox.

Have you verified that ATX is checking the nonresident box on both the MI-1040 and the Schedule NR?

 - or-

If it is the MD tax on a passthrough entity that MI is allowing as a credit, maybe you could enter that activity to flow only to the Federal and MD returns because ATX should report this on DE anyway since DE piggybacks the Federal, but check for proper inclusion if you try this.

 

[mircpa]

I had situation like yours for my client I check non resident on MI 1040 and on MI Sch NR. It flows through & shows correct amount on line 14 of MI 1040.

[Abby Normal]

13 hours ago, mircpa said:

I had situation like yours for my client I check non resident on MI 1040 and on MI Sch NR. It flows through & shows correct amount on line 14 of MI 1040.

But it doesn't seem “correct” to me. Instructions (and experience) day that only residents get that credit. I mean, the tax they're getting credit for is not on the same income that's taxable in MI.

I'm just going to override it to zero.

Thanks for the reply!

[Abby Normal]

The income taxed in MI is a pass-through MI entity which is not even taxed in MD, so to take the credit for MD taxes paid on the MI NR return is doubly nonsensical.

Thanks for replying!