The California Franchise Tax Board has issued a legal ruling that describes the circumstances in which taxpayers may claim the other state tax credit (OSTC) against income tax or a deduction for state taxes paid to another state. The ruling includes detailed examples of the eligibility for the OSTC or the deductibility of a tax in various situations, including taxes paid to reverse credit states by California residents, multifaceted taxes paid, credits used to offset taxes paid, S corporation and partnership entity level taxes paid, and taxes paid by dual residents.
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