Question

OK resident sold land in KS. Paid capital gains tax to KS. TurboTax verifies AGI & tax paid in KS, but states, "You do not have a credit for tax paid to Kansas." Why?

Forum|Forum|1 year ago
February 19, 2025
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Oklahoma's credit for taxes paid to other states is eligible for taxes paid on income from personal services, such as wages. Tax on capital gains, dividends, interest, unemployment, rental income, etc is not eligible for the credit.

See: Oklahoma Credit for Taxes Paid to Other State

O

okiedokieAuthor

According to Oklahoma.gov, "An Oklahoma resident individual is taxed on all income reported on the federal return, except income from real and tangible personal property located in another state, income from business activities in another state, or the gains/losses from the sales or exchange of real property in another state.

Note: Residents are taxed on all income from non-business interest and dividends, salaries, commissions and other pay for personal services regardless of where earned. Wages earned outside of Oklahoma must be included in your Oklahoma return, and credit for taxes paid to/in other states claimed on Oklahoma Form 511-TX. (See Form 511, line 16.)" (https://oklahoma.gov/content/dam/ok/en/tax/documents/forms/individuals/current/511-Pkt.pdf)

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KeshaH

Income that is excluded from Oklahoma tax would not be eligible for the other state tax credit since it wouldn't be included in Oklahoma income and not double taxed.

To exclude this income from tax, you would report other state income in the Out-of-State Income or Losses section, if you haven't already.

If the gain has already been reported here, it should already be removed from your Oklahoma income and tax.