In a message dated 9/19/2007 12:29:33 A.M. Eastern Daylight Time,
gamblinggrandma@yahoo.com writes:
I don't understand how Illinois could tax our entire income when we
don't live in the state or work in the state; we just won a jackpot
in one of their casinos when visiting the area. We pay our taxes to
the state we live in so how can Illinois tax us as well?
Many states have switched to an all income basis to determine your tax
liability as a nonresident. You are still only taxed on your income from that
state but the total tax liability is determined by all your income and then the
in state % is applied to the total tax. Since most states have at least some
progression to their tax rates, that results in a higher state tax. For
example, if you had total income of $100,000 and $20,000 was gambling winnings
from that state, most states now will have you determine your tax on $100,000
and take 20% of that amount as your state tax liability. That will usually
result in a higher tax that in you reported income of $20,000 and paid tax on
that amount. Your home state may give you a credit for what you pay to
another state but there are usually some limitations as to how much if any credit
is allowed.
************************************** See what's new at http://www.aol.com
[Non-text portions of this message have been removed]