Special Conversion Chart Instructions for Tax Year 2012
for Nebraska Form 1040N - Schedule II, Lines 60 and 62
and Nebraska Form 1041N - Schedule III, Lines 2 and 4

Updated 05/06/2013


  1. For married, filing jointly accounts, that file married, filing separately with the other state: Since the line 60 instruction says to use the other state's total W-2 wages, use only the other state's wages of the spouse filing the separate return. Do not use the wages of both spouses.

If the filing status on the Nebraska return is married, filing separately, but a married, filing jointly return is filed in the other state, the credit must be prorated.

If the other state’s return separates the income of both spouses, use the income and tax paid to the other state reported by the spouse who is filing the resident return with Nebraska. If the income is not separately stated, the account will be reviewed by the Department.

  1. If your line 60 entry excludes non-Nebraska S Corporation or Limited Liability Company income from non-Nebraska sources, lines 60 and 62 should be less than that indicated using the Conversion Chart. If you indicate that the credit has been adjusted because of non-Nebraska S Corporation or Limited Liability Company income,  lines 60 and 62 will generally be accepted as reported. If Line 60 includes a non-Nebraska S Corporation or Limited Liability Company loss from line 49, line 60 should be more than that indicated using the conversion chart.
     
  2. Dual State Residents (Schedule II - Special Calculation)
    If you are a dual state resident (whose total income is reported to both states) and are claiming credit for tax paid to those states, calculate the credit by using the following formula:

    Take the lower tax liability of the two returns and multiply by the ratio of the Nebraska liability, divided by the combined tax liabilities on the two returns.

    For both returns, the liability referenced in the above formula is the liability after nonrefundable credits, with the exception of the credit claimed for payment of tax to the other state representing the dual state residency.

On fiduciary returns, the tax liability for each separate state is computed on only the portion of the trust's income which is subject to tax in both states.

First determine the tax liability for each of the resident returns in order to determine which state has the lower liability. The tax amount is computed on the portion of the trust's income which is subject to tax in both states. If there are any modifications to the other state’s income which are not the same modifications taken on the Nebraska return, (such as an addition for a state income tax refund, etc.), the modification must not be included when determining the portion of the trust's income that is taxed in both states. In most situations, the liability for each state that is used in the formula should be the tax liability after all non-refundable credits except for the credit for tax paid to the other state.

  1. Electronic Filings
    Electronically filed forms are treated like any other state form. If it is not identified on the Conversion Chart,  the Department may further review the returns.