I live in KY, work in OH. Do I have to file state taxes for KY and Oh?

[ChelsiE2 · Accepted solution]

[edited: Mar. 6, 2016, 8:41pm]

Ohio and Kentucky have a reciprocal agreement.  This means that if you live in one of these states but work in the other, you'll only need to file a return for the state in which you live.  

Therefore, you'll need to file a Kentucky State Return.

If the only Ohio based income you had was from your employer, then no you do not have to file an Ohio return.  Ohio makes an exception to their filing requirement, in this case, if you live in a boarding state.  

For more information on State Reciprocal Agreements: 

https://ttlc.intuit.com/replies/4776822

[Hal_Al]

Ohio has a reciprocal agreement, on wages, with all neighboring states. No Ohio state taxes are withheld or due and you do not need to file an OH return. But your home state will tax you on your Ohio income.
If Ohio taxes are mistakenly withheld, you have to file an Ohio return to get a refund. You should ask your employer to stop withholding so you don't have to file an Ohio return every year.
However the reciprocity agreement does not apply to local city taxes. You are not required to file a local city return, but you are also not entitled to a refund of the city withholding, unless there was an error in the amount

[mcgill2724]

In filing the federal return it asks for information on those local city taxes though. Which then leads to prompting me to file on Ohio state return later. Do I just omit the info in regarding the Ohio tax in box 15 of my return and only fill out the one for KY?

[Hal_Al]

This is the first I've heard of this problem.
When you enter OH in box 15 and the info from boxes 18-20, be sure boxes 16 & 17 are blank.
If that doesn't work try leaving box 15 blank, but I suspect TT won't let you do that.
On the other hand, the only thing necessary may be to just say no when asked if you want to do an OH return.

[Hal_Al]

The information in box 19 is only needed on the federal return if you  itemize deductions. If you don't itemize, just leave boxes 15-20 blank

[mcgill2724]

Thanks a lot for your response. I filed last night but did pretty much everything you suggested; left 16 and 17 blank, and said no to the ohio state return. I know they're reciprocity states i just don't know why it prompts me to do the return every year and i pay for 2 extra state filings for no reason...

I was actually doing it again this year just because i always had, but it kept prompting me to enter number values on a digital longform tax form without any guidance as to where i was supposed to get those numbers from...

Asked a couple friends in similar situations and they said they don't have to do an ohio one. They go through a cpa though. Not sure why TT doesn't recognize my situation and stop prompting me to do them every year.

Anyway its done now! Thanks again.

[Hal_Al]

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.

[Scarli07]

How did you account for the income you made in OH but didnt pay KY taxes on? Did you owe KY state taxes?

[TomD8]

@Scarli07 —. If you’re a resident of KY, ALL your income is taxable by KY, including any income earned in another state.

[smac77]

Yes, this is interesting. It's April, 2024, and it's my first time using TurboTax and it's trying to get me to do both an Ohio and KY return. I think they're just trying to squeeze some extra juice from the lemon.

[DaveF1006]

To clarify, do you work in one state and live in another? Let me know which is which. If there is any juice from the lemon to be squeezed, let me be the one to squeeze it.

@smac77 

[smac77]

I live in Ohio, work in Kentucky. 

[DawnC]

OH, your resident state, taxes all of your income.   You will owe tax to KY for any wages earned while working in KY.   However, OH will give you credit for any tax paid to KY, so you are not double taxed.    Is your employer withholding KY tax?   That is why you have to file the nonresident return.   You can have your employer withhold OH tax instead.  

You should complete 42A809 and give it to your KY employer.   KY has a reciprocal agreement with OH, so your employer will withhold OH tax if you give them that form, and you won't need to file any more KY returns.    @smac77 

[smac77]

Thank you for your response. My employer seems to be separately withholding both Ohio state income tax and Kentucky local county and city taxes. It's actually reported on one main W-2 (including a county local tax), and two additional ones further documenting the local (city, in Kentucky) and state (Ohio) taxes. 

I've had difficulty with inputing these three separate withholdings into the Turbotax web app, but will try again soon. Hopefully now that I understand it better I might be able to input the info with more confidence.