Do I File a Nonresident State Tax Return or Not?

[englehn11]

For all of 2022, I lived in state of KY & worked in state of OH.  Those two states have a tax reciprocity agreement whereby workers owe state tax only in the state where they live.  I have an OH Form IT 4NR (Employee’s Statement of Residency in a Reciprocity State) on file with my employer stating that my pay is exempt from OH state tax withholding.

Under the Intuit Turbotax on-line Help section, I found an article from two weeks ago which stated:     

“State reciprocal agreements. You won't have to file two state returns if your resident and work states have a reciprocal agreement and you submitted the proper exemption form to payroll.” 

Based on that, I thought I needed to file only one state tax return, for my resident state of KY.  But when working my way through the Turbotax screens for state tax filing, I keep getting prompts telling me I also need to file an OH state tax return.  So do I have to file an OH state tax return or not?  If yes, why?  No OH state tax was withheld from my pay and, due to the reciprocity agreement, I owe no OH state tax.     

[KrisD15]

If you live in KY, and work in OH, you would only file a Kentucky state return.

If Ohio tax was withheld, you would also file an Ohio state return for the refund. 

From the description of your situation, you should only file that one resident state return for Kentucky.

[Hal_Al · Accepted solution]

In the personal info section, when it asks if you made money in another state, answer NO, per the reciprocal state instructions, on that page. This will prevent TurboTax from thinking you need to file an OH return.

You didn't ask, but be advised that  the reciprocity agreement does not apply to local city taxes. You are not required to file an OH local city return, but you are also not entitled to a refund of the city withholding (box19 on your W-2), unless there was an error in the amount. If you are subject to a KY county or city tax, you should check to see if the KY city will give you a credit for the OH city tax withheld. KY does allow an itemized deduction (Schedule A) for local tax paid.