Q. I live in the state of Indiana and work in the state of Kentucky.Is there any way that I can not have Kentucky state and city taxes come out of my check?
A. No.
IN & KY have a reciprocal agreement, on wages. No KY state taxes are withheld or due and you do not normally need to file a KY return. But IN will tax you on your KY state income.
However the reciprocity agreement does not apply to local city & county taxes. Your employer must withhold those and can not get those refunded. Some (but not all) IN counties (but not the state) allow a credit, or partial credit for tax paid to a KY city or county. That will come up in the IN state interview.
