I have a new client who in 2018, received a refund for his Indiana county taxes (which was around $400). His previous tax preparer Paper filed his Indiana Reciprical Tax return and placed zeros Where it asked for indiana income and state withheld but had the local tax filled out and a refund for the exact local tax. His employer withheld KY State taxes since he lives in Kentucky, but they still withheld Indiana county taxes. I called the Indiana Department of Revenue and they stated he should not be getting a refund for his local tax amount UNLESS he over paid in local taxes. But it seems like the previous tax preparer was able to get my client a refund with his local taxes. Does anyone know what the correct answer is? I would love to get him a refund the same way as the previous tax preparer did but dont want it to bite him in the butt later when he has to pay that refund back.
