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Category: Mississippi

Mississippi Credit for Taxes Paid to Another State

If you are a resident of Mississippi who earns income in another state and are required to pay an income tax to that other state, you are allowed to take a credit against your Mississippi income tax due in the same year for the total income tax due to the other state (subject to certain limitations).

In order to be allowed this credit, you must file an income tax return with the other state, and attach a copy of this return to your Mississippi return. The withholding amounts shown on your W-2 forms are not the same as actual tax paid to the other state. There are limitations to this credit such as:

  1. The credit may not exceed the amount of income tax due the State of Mississippi,
  2. The credit may not exceed the amount of income tax actually paid to the other state, and
  3. The credit may not exceed an amount computed by applying the highest applicable Mississippi rates to the net taxable income reported to the other state. Highest rates are meant to mean the highest rates at which the net taxable income reported to the other state is taxable by the State of Mississippi.

TaxSlayer will automatically calculate this credit for your Resident Mississippi return when you create a Nonresident return in your account. If the other state return is a Part-Year Resident return, you will be required to enter the information asked of you within your Mississippi return.

For additional information, please click here.