I live in Michigan and work in Toledo, OH. What do I need to do with regards to taxes?

[pj4]

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?

[Hal_Al · Accepted solution]

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.  

[slb4everyours]

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?

[thoroldhouse]

Good question slb4everyours!  Help!

[Hal_Al]

You have to mail your MI return, in order to attach a copy of the toledo return.

[thoroldhouse]

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_Al]

You have to manually enter it in the MI interview.

[weigand-49]

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???

[Hal_Al]

@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/

[mcman1hm]

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!!

[Hal_Al]

@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/

Download Tax Forms

[elynnh97]

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.

[Hal_Al]

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

[elynnh97]

Thank you!  Mine was greyed out, but it still let me click on it.

[AmyC]

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.

@elynnh97