I am a resident of WI, and work for a company with a location in Indiana. About 75% of the time I work from home in WI, and the remainder I travel to Indiana to be on site physically. Indiana and WI have a tax reciprocity treaty, so all state tax withholding is for WI. My question is about local taxes in Indiana which are not covered by the tax treaty. My employer has counted the number of days I work on site, and used that to determine the fraction of my total income to put in Box 18 of my W-2 and withheld local taxes according to the county of the Indiana location.
As I understand it, I am considered a Reciprocal Non-resident for Indiana local tax purposes, so I am following instructions for IT-40RNR. In those instructions it asks "Was your principal place of employment on Jan. 1, 2022, located in an Indiana county?" I can't find a definition for principal place of employment in this document, but elsewhere I found 45 Ind. Admin Code 3.1-4-8 defines it as "that county where the taxpayer receives the greatest percentage of his or her gross income from salaries, wages, commissions, fees, and similar income."
Based on this, it seems that my principal place of employment was Wisconsin, not an Indiana county, and therefore I can claim a refund of those Indiana local taxes. Am I interpreting this correctly?
