On W-2 State field says OH. Did taxes get taken out at OH rate, not MI? I work in Toledo, can I get city tax credit through my MI State Taxes? If so, how does that work? May have an underpayment penalty, how do I verify that?
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. If box 15 of your W-2 has OH and there is an amount in box 17, there was OH state withholding. However if there is OH in box 15 and boxes 16 & 17 are blank but there are entries in boxes 18-20, OH is only shown to identify the state of the city tax withholding. You do not need to file an OH state return.
However the reciprocity agreement does not apply to local city (Toledo) taxes. You are not required to file a local city return, but you are also not entitled to a refund of the city withholding (box 19 f the W-2), unless there was an error in the amount. But, Michigan will give you credit for that on the state return, but you have to attach a copy of the city return. So, even though the Ohio city does not require you to file a return, you have to file one (or, at least, prepare one) to get the MI credit, even though there will be no tax due or refunded from the Ohio city.
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. If box 15 of your W-2 has OH and there is an amount in box 17, there was OH state withholding. However if there is OH in box 15 and boxes 16 & 17 are blank but there are entries in boxes 18-20, OH is only shown to identify the state of the city tax withholding. You do not need to file an OH state return.
However the reciprocity agreement does not apply to local city (Toledo) taxes. You are not required to file a local city return, but you are also not entitled to a refund of the city withholding (box 19 f the W-2), unless there was an error in the amount. But, Michigan will give you credit for that on the state return, but you have to attach a copy of the city return. So, even though the Ohio city does not require you to file a return, you have to file one (or, at least, prepare one) to get the MI credit, even though there will be no tax due or refunded from the Ohio city.
How do I enter this in Turbo Tax? I input my Toledo and Maumee taxes withheld and Turbo Tax says I am not eligible for a tax credit. Also, can I attach my city return and still efile in Michigan?
You have to mail your MI return, in order to attach a copy of the toledo return.
So I have to go to the Toledo city tax site to get that return...then print my MI return from turbo tax and attach it. One issue still is how to enter in the Toledo city tax paid on my MI return. I know it needs to go in box 18A. If I just print it and handwrite it in, doesn't that then change the totals in the other boxes that follow, making my printed Turbo Tax MI state return not usable? Thanks!
Hal, It looks like you've answered several questions about Michigan residents working in Ohio! In 2019 I paid Michigan state taxes and Columbus city taxes but not Ohio state taxes. Last year I installed turbotax and the software made sure that I first prepared my Michigan return as a resident before preparing Ohio as a nonresident. This year I've been doing working with Turbotax in an internet browser and I can't get this order right. Do you think preparing Ohio first is tricking the system into saying I owe Ohio's state taxes???
@weigand-49 - It's not clear why you are even bothering with doing an Ohio return.
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 say no OH state tax was withheld. If you are a MI resident, that is correct. You do not file an OH state return. You owe nothing and there is nothing to refund.
You cannot get a refund of the Columbus City tax and you are not required to file a Columbus city return. But, Michigan will give you credit for that on the state return, but you have to attach a copy of the city return. So, even though the Ohio city does not require you to file a city return, you have to file one (a Columbus city return, not an OH state return) to get the MI credit, even though there will be no tax due or refunded from the Ohio city.
TurboTax cannot do a Columbus City Return. You can get forms (or even file online) at: https://www.columbus.gov/IncomeTaxDivision/
Hello! Please help! I also live in Michigan and work in Toledo. Just seeing this about the credit I can file with the state of Michigan for the taxes I paid to Toledo. It says I have to attach a copy of my Toledo, Ohio return to my Michigan return. All I have is my W2 that states I paid Toledo city taxes. How do I obtain a Toledo, Ohio return? Thank you!!
@mcman1hm Toledo city residents have to file a city tax return, just like they file a state and federal return. You will have to do the same and save a copy to mail with your MI state return.
You can not prepare a Toledo return in TurboTax. Obtain forms, or prepare/file online at:
https://toledo.oh.gov/services/finance/taxation-and-treasury/tax-forms-information/
The Toledo site only offers info on where to pay. Where do we get the forms to complete the taxes at? I obviously won't owe Toledo and they may owe me, but I don't see how to ever get that information.
Also, in general if I pay into Toledo city all year and I want to have the credit added to Michigan, what will that do to my Michigan return if I usually get a payment (not owe)? Will this possibly raise the amount of return I get? I've missed the last 4 years of this option, but I'm not going to try to amend other returns (and complete 2020) if it really isn't going to make a difference. The amount I've paid in yearly for the last 4 years is between $1500-2000 to Toledo on returns that are usually between $500-1500.
Get the form at:
https://toledo.oh.gov/services/finance/taxation-and-treasury/tax-forms-information/
Where it says:
Download Tax Forms
Select a Document ->
scroll down to 2020 Individual Tax Return (as a non resident, you don't qualify for the 2020 EZ Toledo form)
Q. Will this possibly raise the amount of return I get?
A. Yes
Thank you! Mine was greyed out, but it still let me click on it.
Toledo form for personal tax for 2020.The instructions are below the form and states:
This is for use by a Non-Resident whose employer withheld Toledo tax from their wages while they worked outside of Toledo. PLEASE NOTE THAT THIS FORM MUST BE COMPLETED ENTIRELY AND THAT THE EMPLOYER CERTIFICATION MUST BE SIGNED AND BE INCLUDED WITH THE RETURN WHEN FILED. See additional instructions on our website as to the taxability of wages and definitions of work locations that changed due to revision of Ohio Revised Code Section 718 as a result of House Bill 5 requirements.
@Hal_Al effectively answered the MI questions above. If you need further help, let us know.
One more quick question...do the Toledo forms need to be submitted to Toledo so they are on file there as well or just filled out and added to my Michigan return?
Amy C you referred to "THE EMPLOYER CERTIFICATION MUST BE COMPLETED AND SIGNED"......but it looks like that is regarding non-residents who worked OUTSIDE City of Toledo. To be clear, for those of us who are MI residents and earned all of our income inside Toledo we just need to file the first page of the 2020 Toledo Individual Tax return and send it to the City of Toledo to officially file, then include a copy of that form with our MI tax return to file in MI for the credit.
Do I finally understand this correctly?
Yes, you do understand the process correctly to obtain the credit for taxes paid to another state or locality on your MI return for the wages you earned in Toledo. To confirm, the process is to complete the Toledo return, file it with your MI return and with the City of Toledo.
Your W-2 is proof of paying the tax along with the local return which verifies there is no refund of that tax from the City of Toledo.
A City of Toledo taxation employee told me that if I owe nothing to them and they owe nothing to me, I do not have to file a return with them. Just to Michigan. It won't hurt to do so, but it is not necessary.
@elynnh97 Yes, you are correct that a return does not need to be filed if no taxes were withheld on your W-2.
There are two issues here: Toledo would rather you didn't file; it's just unnecessary paper work for them. What's not clear is what MI "really" wants.
Turbo tax has made this very difficult and very simple at the same time.
When you are filing for your state refund. In the "Take a look at Michigan credits and taxes" section, under "Other credits". Start, "Other State Tax Credit." Answer yes to, "Qualify for other state credits?" This is where it got me because you assume you want to look for the state of Ohio to select. However, you need to select "City/county/locality outside of Michigan" at the top of the drop down menu, then hit continue. Then next screen type in OH Toledo for "Local Government". Next screen type in the amount in box 19 on you W2, in the box "Tax paid to OH Toledo (US $). Then click continue. You are now credited the amount you paid to Toledo.
Hope that helps.
I want to confirm: If I follow the steps you list in turbotax for the credit of the Toledo city taxes on my Michigan return is there still a need to print and mail copies to MI state?
Yes. Michigan says, "Include a copy of the return filed with the other government unit(s) with your MI-1040. If you do not include the return file with the other government unit(s) when claiming this credit, processing of your return may be delayed or your credit may be denied."
@awojnow see page 10 of the MI-1040 instructions