Daughter is a WV resident and worked a summer internship in Ohio where her employer withheld Ohio state taxes. She also had wages from her other job in West Virginia. She had some scholarship income as well. How do we claim a refund from Ohio and file WV taxes?
If she worked in Ohio and is a resident of West Virginia she does not have to pay Ohio income taxes on her wages. If she works in OH in the future, she can submit exemption Form IT-4NR to her employer so they don't withhold OH tax.
First, she will report all of her income on a federal return. Next, she will complete a nonresident tax return for OH. Nonresidents can claim a credit on Ohio Schedule of Credits, for income not earned or received in Ohio. TurboTax will guide you through the return. And lastly, she will complete a resident West Virginia tax return.
If she worked in Ohio and is a resident of West Virginia she does not have to pay Ohio income taxes on her wages. If she works in OH in the future, she can submit exemption Form IT-4NR to her employer so they don't withhold OH tax.
First, she will report all of her income on a federal return. Next, she will complete a nonresident tax return for OH. Nonresidents can claim a credit on Ohio Schedule of Credits, for income not earned or received in Ohio. TurboTax will guide you through the return. And lastly, she will complete a resident West Virginia tax return.
Thank you! So will she get a full refund of the taxes withheld in Ohio? And her Ohio income will be applied to her WV taxes?
Yes, she will get a full refund of the Ohio state tax withheld (box 17 of her W-2). She will not get any city tax (box 19) withheld, as the reciprocal agreement does not apply to city tax.
The OH refund will NOT be applied to the WV return. You have to pay the WV tax due, separately. "Any credits from OH will be applied to her WV tax return" is an incorrect statement.
Be forewarned: 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 WV in box 15 of your W-2 screen, with the WV amount in box 16.
If you indicated you were a WV resident in the personal info section and an Ohio non resident, at the Ohio residency screen in the state section; you’ll get “Neighboring State Compensation” screen early in the Ohio program. There you enter the box 16 amount from your W-2 that Ohio taxed.
OR
After indication you were a non resident of Ohio and a WV resident at the Confirm Ohio residency screen
-"Here's the Income that Ohio Handles Differently"
-Miscellaneous
-Wages of Full year residents of neighboring states
See screen shot at <a rel="nofollow" target="_blank" href="https://ttlc.intuit.com/questions/4256143-can-not-figure-out-adjustment-allocation-part-in-my-taxes-i-live-in-michigan-full-year-and-work-in-ohio-with-no-other-income-how-do-i-fill-this-out-or-do-i-need-to">https://ttlc.intuit.com/questions/4256143-can-not-figure-out-adjustment-allocation-part-in-my-taxes-i-live-in-michigan-full-year-and-work-in-ohio-with-no-other-income-how-do-i-fill-this-out-or-do-i-need-to</a>
Thank you for the detailed explanation.
However, when I entered all her numbers on turbo tax (online free edition), she is not getting a full refund of the Ohio taxes withheld.
Her Ohio wages are around $8500 (box 16 of W-2) and Ohio state taxes withheld are $221 (box 17).
She also had other income of around $11,400 from her part time job in WV and excess scholarship (unearned income). Her total income was around $19900 (Ohio income $8500 plus other income $11400).
This is what Turbo tax said for Ohio:
Ohio taxes already paid $221 + OH credits we found $23 - total OH taxes $92 = $152 your OH refund
Shouldn't she be getting all of the $221? Why is Turbo tax saying she gets only $152?
I don't know what went wrong. Should I delete both state taxes and start over again?
Any help would be appreciated. Thank you!
TT is still showing she has OH income. The most likely error is you are showing the scholarship as OH income. It is not. Even though she may go to school in OH, that income is considered WV income when you do the allocation (because she is a WV resident).