You do not need to ask for your local taxes back from KY. Instead, you can claim them on your IN state return to receive a credit for the tax paid. Your IN return combines both state and local taxes. The KY local tax would be a credit up to the amount Indiana locally would have charged on the same amount.
You do not need to file a non-resident return for KY.
To help clarify and navigate:
Regardless of where you work, Indiana will assess local taxes based on where you live (county of residence). But if you are paying local taxes in another state they will give you a credit for the amount of local tax you paid out of state (but only up to the amount of local tax you would have to pay to your Indiana county. They are claimed on Indiana Schedule 6 (taxes paid outside of Indiana). In Turbo Tax:
1. In State Taxes tab, continue to Your County of Employment Screen
2. For County of Employment, Scroll all the way to the end, and select Out Of State-Kentucky
3. Continue your Indiana Return until Take a Look at Indiana Credits and Taxes
4. Select Start on Credit for Non-Indiana Local Taxes
5. Fill in the information on the following screens (locality, what state, and how much local tax paid to state).
TurboTax will calculate the credit.
@yougogirls2
[Edited 1/21/2021 |2:24 pm PST]
**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
