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Multi-state return, possible issues with allocations. Help?

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Level 1
last updated ‎December 07, 2019 5:15 AM

I have a client with a 5 state return, everything has been input but IL is shooting back an error "Return Cannot Be E-filed When The Sum Of Illinois Wages Plus Out Of State Wages On All W-2s Does Not Equal Total Wages Reported On IL Sch CR" I think this has to do with W2 allocations vs state allocations. Can anybody confirm? Also, the W2 shows NY income of $65k but it should really be about $500.00 Can I change that or should that only be done via W2C?


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Level 11
Level 11
last updated ‎December 07, 2019 5:15 AM

I believe it has to do with W-2 allocations. I had a NJ resident with 6 states including Illinois and I did not get this error and I am efiling Illinois. 

                                                                                 -Now-

I am also filing another client that has 3 states (IL part year, AZ part year, MD non resident). I had this issue last year at resident IL and MD non-resident. I took a credit in IL on MD taxes paid and I could NOT file my Illinois electronically. I was getting same error as you. I paper filed and client was not given this credit on Illinois. I have not resolved as of yet (client is dragging feet as they moved in '18 out of state). I must also file paper in current year. Illinois will most likely deny credit on return for 2018. 


W-2C is the way to go, imo.

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Level 11
Level 11
last updated ‎December 07, 2019 5:15 AM

I believe it has to do with W-2 allocations. I had a NJ resident with 6 states including Illinois and I did not get this error and I am efiling Illinois. 

                                                                                 -Now-

I am also filing another client that has 3 states (IL part year, AZ part year, MD non resident). I had this issue last year at resident IL and MD non-resident. I took a credit in IL on MD taxes paid and I could NOT file my Illinois electronically. I was getting same error as you. I paper filed and client was not given this credit on Illinois. I have not resolved as of yet (client is dragging feet as they moved in '18 out of state). I must also file paper in current year. Illinois will most likely deny credit on return for 2018. 


W-2C is the way to go, imo.

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Highlighted
Level 15
last updated ‎December 07, 2019 5:15 AM

In your case, I agree W-2C is the way to go, especially since NY wages are incorrect to start with.

In other case, IL will only allow a credit to be claimed with respect to non-IL income based on its own sourcing rules under IITA and using IL income as the base.  This would be a problem if the other state taxes income that is exempt from IL or has a different sourcing rule (e.g. NY taxation of employees who telecommute not for the convenience of the NY employer) where non-IL source income may then need to be adjusted on Sch CR based on IL sourcing rules.  So long as these adjustments are made, the credit should be allowed whether filed electronically or on paper.

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