Just like the beautiful Sirens luring nearby sailors to a rocky shipwreck, those aimlessly navigating the waters of state tax credits can end up with a similar fate. The Sirens, in this case, are certain purveyors of state tax credit services. They will sing you songs of promises to provide you free money that your accountant doesn’t know about. And best of all, at no cost to you.
While state tax credits are a great resource as are a handful of practitioners that specialize in securing them, many have a rudimentary understanding of federal and state tax planning in general, let alone your specific circumstances. While a taxpayer may be able to secure a tax credit from a particular state, surprisingly this may have little or no impact on your overall tax burden. In fact, it may end up costing you.