I sold a home in Ohio, where we did not live. I went through Ohio State taxes first, as advised in another question. However, Ohio picked up all of my income, intereset....? Maryland picked it up as well an only credited me the cost of taxes? Seems wrong?
Called support. Couldn't help.
Ohio has a progressive tax system so it uses all of your income to determine your tax based on your total income. Ohio then applies your Ohio income percentage (to the total tax) to determine your nonresident tax due.
Ohio does a convoluted tax calculation for non-residents/part year residents. It calculates tax on total income, then it calculates a non resident/part year resident credit, which it subtracts from the tax it calculated on the total income. The credit is calculated as your non-Ohio income divided by Total adjusted Income multiplied by the total tax. TurboTax (TT) does this by allocating your income as either Ohio or non-Ohio. W-2 income will be allocated by the state name abbreviation shown in box 15 of your W-2. TT will ask you, item by item, in the state section, how much of your other income is Ohio or non-Ohio income. Make sure that your non-Ohio wages show MD in box 15 of your W-2 screen, with the MD amount in box 16.
Q. Maryland picked it up as well an only credited me the cost of taxes?
A. Yes, that's correct, if MD gave a credit for the amount of tax your paid to OH.