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Avalara Help Center

Why wasn't a carry-over credit applied to my tax liability?

Overview

You have a carry-over credit that wasn't applied to the current tax liability period.

Environment

Returns

Resolution

  • Credits are only applied if the tax liability for the period is larger than the total credit amount.
    • It'll carry over to the next period, until there's a period where the tax liability is greater than or equal to the full amount of the credit.
    • You may also adjust the transaction(s) that produced the credit to break up the credit into smaller amounts that can be absorbed by your average tax liability.
  • If the credit is too large and your period liability won't be greater than the credit, amended returns can be done.
    • To have Avalara amend the original return, learn more here.
    • You can also amend or file late returns directly with the state. 
    • This will create a credit with the jurisdiction.
  • If the credit is smaller than the liability or equal to it, confirm that the credit is for the same kind of liability you want it to apply to.
    • Credits for sales tax can't apply to consumer use tax liability and vice versa.
  • To view all carry over credits, applied or excluded, you can run the Carry-over Credit export report.

 

Note: Carry over credits cannot be partially applied.

Next steps

For more information, see vendor discounts and credits.