Form 740-NR-R is the form you fill out and give to your employer so that only Indiana Tax is withheld on your Kentucky earnings.
If you had Kentucky tax withheld (look at your W-2 lines 15, 16, and 17) then answer Yes, you have earnings in another state. Open the Kentucky return and report zero earnings. The program will take the withholding reported on your W-2 (which you already entered on the Federal screens) and show the Kentucky tax as a refund. If there was no Kentucky tax withheld, there is no reason to file a Kentucky state return.
Next, do your Indiana return and claim all your earnings, including what you earned working in Kentucky.
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