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buzzlight
New Member

Do I pay OH non-resident state tax on only the income allocated? TT takes into account my complete Federal joint return as income to calculate OH taxes? How do I fix it.

I am resident of TX. I went to our OH office for a few days to work and my employer allocated a portion of my W2 income to OH State and Local taxes. When Turbo Tax Premier fills out my OH state return, it uses my Federal Joint Filing status and all my income including my spouses (who has no income from OH), interest and dividends etc. into calculating OH taxes. According to OH income tax we site, it says I am suppose to pay taxes on only the income I earned in OH, I get credit for all non-Ohio income. How do I fix this in Turbo Tax?

2 Replies
buzzlight
New Member

Do I pay OH non-resident state tax on only the income allocated? TT takes into account my complete Federal joint return as income to calculate OH taxes? How do I fix it.

Can I start a new return for OH State Tax and just use my W2 information?
Hal_Al
Level 15

Do I pay OH non-resident state tax on only the income allocated? TT takes into account my complete Federal joint return as income to calculate OH taxes? How do I fix it.

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 TX (Other state postal abbreviation)  in box 15 of your W-2 screen, with the TX amount in box 16.

This system allows Ohio to apply their highest tax rate, based on your total income, while only taxing your Ohio income.

Ohio has a nonresident credit allocation form.. IT NRC

http://www.tax.ohio.gov/portals/0/forms/ohio_individual/individual/2017/PIT_ITNRC.pdf 

You do not have to file a tax return for the City (local) for which tax was withheld in box 19 of your W-2. You usually cannot get a refund. Some cities have an occasional entrant  exemption for as much 20 days. You would have to contact the city to see if you qualify for a refund (although I would think your employer would know that).

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