I don't know what state you live in, but in my state of residence income
tax paid to other states is a credit. It drops my state income tax
liability by the exact amount withheld by the "foreign" state. Now for
the federal filing, state income taxes paid (regardless of what state
they are paid to) are deductions. Obviously you don't get both a
deduction and a credit on the same filing. For federal filing the MS
withholding is an itemized deduction on Schedule A. For the state
filing, the MS tax withheld is a credit.
I'm not sure of the relevance of your comment about sales tax. The MS
withholding is definitively an income tax, not a sales tax. I know you
have the option on your federal form of either deducting state income or
sales taxes, but most people I know who live in states that impose an
income tax opt for the income tax deduction. It is a far larger
deduction for me than the sales tax option.
SB
--- In vpFREE@yahoogroups.com, Joseph Annechino <floridagambler@...>
wrote:
I would have to disagree with you. You can deduct the Mississippi
state income tax withheld as an itemized deduction not as a credit
against your states income tax. If you do deduct state income taxes as
an itemized deduction, you can't also deduct sales tax. It is one or
the other.
--- In vpFREE@yahoogroups. com, "howardwstern" <howard.w.stern@ ....>
wrote:
ยทยทยท
> >
> I do not know about LA but it is 3% in MS. PS: They call it a fee
> rather than a tax which means you cannot reduce your home state tax.
>
This isn't accurate. I got a W2-G from MS last week. Box 14 clearly
is listed as "State income tax withheld". I certainly plan to offset
it as a credit against the state income tax liability in my home
state. This is consistent with what Marissa and Jean day in Tax Help
for Frugal Gamblers (P 104).
SB