IN and Ky reciprocity

Forum|Forum|6 years ago
January 27, 2020
1 reply
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So, I have a KENTUCKY based LLC because my residence is KY. However I have some Indiana based rental income. Specifically, I received a 1099 MISC from the New Albany (indiana) Housing Authority. The 1099 MISC I got has 18 boxes, and all are 0 including box 18 which is state income. However, Box 17 has the Payer's state no. Traditionally I have not filed an Indiana state income tax return....what should I do here if this income is reported and taxed on my federal and KY Schedule E for my pass through LLC?

I have already filled out form wh-47 which is the KY/In reciprocity agreement. My thought process is since the income is included in my KY based LLC's income, why should I report and pay taxes to Indiana?

Hal_Al

Level 15

Rental income and self employment is not covered by the reciprocity agreement. Only W-2 wages are.

If your rental activity is showing a net profit, you are required to file an IN return and pay IN tax. KY will give you a credit or partial credit for any tax you pay to IN

If you have a net loss (you have no IN income), you do not need to file.