Another tax question: involving 2 states

Parent Cafe
1

<p>I have done a bit of looking on the 'net, but haven’t found what I am looking for. I’m hoping someone here has already dealt with a similar situation and can help.</p>

<p>Our son purchased a car right after he graduated from college. He registered it in Michigan (where his parents live) and paid Michigan sales tax. 6 weeks later, he moved to Minnesota to start his new job.</p>

<p>Our son earned no money in Michigan and is filing his state income tax return for Minnesota. </p>

<p>If he had paid the sales tax in the state where he is filing, he could claim a deduction.</p>

<p>Can he claim a deduction in this instance, and how does he do it?</p>

<p>Thanks in advance!!</p>

2

<p>Hi, do any of the wonderfully wise and knowledgeable CC parents have information or advice?</p>

3

<p>Umm, awkward. I couldn’t find any reason he couldn’t claim the automobile sales tax paid … but neither could I couldn’t find and statement that he could. (I’m presuming he wants to deduct both MN sales tax (based on income while in MN), and MI auto sales tax. Obviously trying deduct MN state income tax and MI auto sales tax is a no-no.)</p>

<p>Here’s the applicable IRS 1040 Sched A instructions (see page A-3):
<a href=“http://www.irs.gov/pub/irs-pdf/i1040sca.pdf[/url]”>http://www.irs.gov/pub/irs-pdf/i1040sca.pdf&lt;/a&gt;&lt;/p&gt;

4

<p>No, he just wants to figure out how to get a state income tax deduction, and since he is only filling in MN (earned no income in MI), that would mean some way to do it on his MN tax. MN and MI have some sort of reciprocity, but I have only seen reference to it in terms of income earned in the 2 states.</p>

5

<p>Um, I’m really confused. According to the MN instructions for income tax form M1, there is no state deduction for either state sales tax or vehicle sales tax (see page 9, <a href=“http://taxes.state.mn.us/Forms_and_Instructions/m1_inst_10.pdf[/url]”>http://taxes.state.mn.us/Forms_and_Instructions/m1_inst_10.pdf&lt;/a&gt; ). According to the instructions, any state taxes deducted on 1040 Shedule A must be added back in to arrive at MN AGI.</p>

6

<p>NewHope, thank you. I’m thinking my brilliant colege grad did not read the instructions very clearly before he asked me what I knew.</p>

7

<p>And anyway, to get a deduction from a state you have to file there, even if you file no income earned.</p>