Q. I'm an Ohio employee for a local company. I'm both a w2 and 1099 employee. The income in question came from a CA based client and the income from the client would have been reported on the 1099. Does your answer change based on this information?
A. No. That just confirms that you are subject to CA tax simply by having a CA based client. You need to file a CA non resident return. On your OH return, you claim a credit for the net tax you end up paying to CA.
Be aware of special OH idiosyncrasy: Your self employment income qualifies for the Ohio BID (Business Income Deduction). So, there is no double state taxation of that income. You will not get a credit for the tax paid to CA. Claiming the BID is optional. So, you MAY want to do the math to see which is better, the BID or the credit for the CA tax (it's almost always the BID). The good news is: it shouldn't be necessary to revise the already completed OH return.
