Q. Do I have to file anything for Indiana?
A. Yes.
Q. Do I have to file anything for Kentucky?
A. No. One exception: if KY state tax was mistakenly withheld, there is a special form (not a whole tax return) you can file for a refund*.
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 a KY return.
KY & IN have a reciprocal agreement, on wages.. No KY state taxes are withheld or due and you do not normally need to file a return for KY. But IN will tax you on your KY income.
If KY taxes are mistakenly withheld, you then have to file to get a refund. IN will not give you a credit. You should ask your employer to stop withholding so you don't have to file a KY return every year.
However the reciprocity agreement does not apply to local city/county taxes. You can not get those (box 19 of your W-2) refunded. Most IN counties (but not the state) allow a credit, or partial credit for tax paid to a KY county/ city. That will come up in the IN state interview. (For details, see:
https://ttlc.intuit.com/community/state-taxes/discussion/i-see-no-separate-question-for-school-taxes...
*KY has a specific form (740 NP-R ) for a reciprocal state refund. Rather than paying TurboTax for KY software, you should try filing that form by hand. It looks pretty simple.
https://revenue.ky.gov/Forms/740-NP-R.020521.pdf
