Q. Can Ohio tax wages earned in Pennsylvania before I moved to Ohio?
A. No. But, that's not what's happening. It only appears that way.
Ohio does a convoluted tax calculation for non-residents/part year residents. It calculates tax on total income, then it calculates a non resident/part year resident credit, which it subtracts from the tax it calculated on the total income. The credit is calculated as your non-Ohio income divided by Total adjusted Income multiplied by the total tax. TurboTax (TT) does this by allocating your income as either Ohio or non-Ohio. W-2 income will be allocated by the state name abbreviation shown in box 15 of your W-2. TT will ask you, item by item, in the state section, how much of your other income is Ohio or non-Ohio income. Make sure that your non-Ohio wages show PA in box 15 of your W-2 screen, with the PA amount in box 16.
This system allows Ohio to apply their highest tax rate, based on your total income, while only taxing your Ohio income.
Q. Shouldn't there be an adjustment that removes the Pennsylvania income?
A. Yes. Instead of an adjustment or deduction, OH uses the credit described above.
Ohio has a nonresident credit allocation form, IT NRC.
https://tax.ohio.gov/static/forms/ohio_individual/generic/PIT_ITNRC.pdf
As an aside, be aware that the reciprocity agreement, on wages, between OH &PA only applies to full year residents. So. it does not apply in your case .
