TurboTax does support the calculation of Indiana county taxes.
However, the only way to prepare it within the program is to prepare a Nonresident Indiana tax return.
You can do this in the state interview section of the program.
Otherwise, you can also prepare the county taxes on your own. Please see the attached link to the Indiana forms.
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Generally, you do not need to file an IN county tax return. Your employer is required to withhold county and you cannot get it refunded (unless there was an error in the amount) as the reciprocal agreement does not apply.
If you are trying to file an IN county return for purposes of claiming the credit on the MI return, be advised MI will give you a credit for IN county tax paid, but it's a hassle.
I am having the same problem, TT did not ask what county I worked in, did not enter county tax due, and now it looks like I get the whole amount back from Indiana. But it was a wash, I paid in exactly what was due. I am claiming the IN County tax due on my MI taxes. So I am getting a double amount back. I don't know if I should just not file Indiana, or take the credit off the MI taxes.
Be sure to indicate you are filing a nonresident return for Indiana. Enter Indiana first, and then Michigan. @Hal_Al is correct, Schedule CT-40NPR is included in the the Indiana IT-40NPR return.
You are correct, the county tax must be paid to Indiana. When I tested this after entering the states in this order, the tax was charged to the county. By entering the county and by entering that I lived in Michigan, the appropriate code was automatically entered.
For more information, go to:
2020 Indiana Tax Forms and search for IT-40NPR Booklet: Part-Year Residents and Full-Year Nonresidents. The county taxes section for Schedule CT-40PNR begins on page 64.