I live in OH but work in PA

Forum|Forum|6 years ago
July 12, 2020
3 replies
11 views

After completing my Pa non-resident return Turbo Tax reported I have a refund due to me. When I completed the Ohio state tax my amount of tax due was reduced by the exact amount I paid to Pa. If I receive a refund from Pa how can Ohio say I don't owe the full amount. It seems that reciprocity is not compensated in Turbo tax. How can Ohio reduce my tax due and I receive a refund from Pa when the tax burdens are similar.

JotikaT2

Alumni - Expert

You are getting a credit on your Ohio return for the taxes paid on the same amount of income reported on your nonresident tax return.

This allows you to claim a credit for taxes paid in other states and ensures you are not taxed on the same income twice in two different states.

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dickgentAuthor

Level 2

Thanks for the response.... And ... I believe the problem lies within the TT software. It will not calculate the Ohio tax I owe (no OH tax was with held Only PA) and will issue a refund from PA. Ohio will accept the return as it did last year because they have reciprocity with PA. If PA does not send them the taxes they collected and Ohio says I owe virtually NO TAX, How is Ohio made whole on my State tax? The software will not direct or allow me to calculate what is owed to Ohio because the amounts are taken directly from the W2's reported to TT federal return. I understand how this is purported to work, what I am telling Intuit is the software is making an miscalculation in reporting state tax owed to Ohio AND Ohio is accepting the return.

Hal_Al

Level 15

You are correct, TurboTax Ohio software does a lousy job, on it's own. You have to use a work around.

Ohio has a reciprocal agreement, on wages, with all neighboring states. No state taxes are withheld or due and you do not normally need to file a return for the other state (MI, PA, KY, WV, IN). But OH will tax you on your other state income.

If other state taxes are mistakenly withheld, you then have to file a return, for the other state, to get a refund. OH will not give you a credit. You should ask your employer to stop withholding so you don't have to file a (M PA return every year.

Be advised that you will probably have to use a work around to get TT to prepare the return properly. At the w-2 screen split the boxes 15-20 W-2 info into 2 lines. On the 1st line leave PA in box 15 but make box 16 blank or 0; leave the PA withholding in box 17. On the 2nd line put OH abbreviation in box 15 and the state wages amount in box 16; leave box 17 blank or 0.

If you reach a screen asking about income subject to double taxation (you normally shouldn't), enter 0. Since you are getting a full refund from PA, you have not been double taxed.