Two options exist, here are the solutions.
1. If no KY tax was taken out due to Reciprocal Agreements, then you do not need to file the form. Instead, return to the personal info section, when it asks if you made money in another state, answer NO, per the reciprocal state instructions, on that page.
2. If you work in KY and had KY taxes withheld as a non-resident that lives is a reciprocal state:
- fill out 42A809 and give it to your employer so you won't have this problem moving forward.
- fill out your KY return before your state return following instructions below
Your resident state taxes all income but gives a credit for income taxed by another state. Please carefully follow these directions.
You will need to prepare the states in a special order. You may need to delete both states and begin again.
- First, prepare your non-resident KY return. This creates your tax liability for the non-resident state. How do I file a nonresident state return?
- THEN prepare your resident state return and it will generate a credit for your income already being taxed in the non-resident state.
- The credit will be the lower of the state tax liabilities on the same income. You may owe your resident state.
It isn't possible for the program to create a credit before it knows the liability. Your returns may be wrong if you do not prepare the states in this order.
See 740-NP-R - Kentucky Department of Revenue
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