Yes. As you surmise since you were not living in one state and working in the other, that reciprocity agreement does not apply in your situation. You will file part-year resident returns for each state.
Since you and your employer did not work the state withholding to reflect your move, ultimately you'll get a refund from VA and pay KY. Below are the steps to file your wages correctly.
NOTE: Be sure to get your state withholding updated for KY going forward. If there was VA withholding in 2024, you'll need to file a non-resident VA return next year to get a refund of that VA withholding.
- In the "My Info" section indicate your resident state on Dec 31st was KY
- Answer "Yes" you lived in another state
- Select "VA" and enter the date you moved to KY
- This will generate part-year returns for both states
- Next, in the "Wages & Income" section enter the form W2 information exactly as shown on your form
- After completing the federal interview work the VA part-year return
- In the income section allocate to VA only the part of the wages that belong to VA
- Divide the number of pay periods during your VA residency by the total pay periods for the employer
- Multiply that percentage by the income in Box 1 of your form W2; this will be the VA portion
8. After completing the VA state interview work the KY interview
9. Allocate the remainder of the box 1 income (after subtracting VA portion) to KY in the income section
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