I moved to Florida in May from Ohio. I have to pay state income tax for Ohio income, however it is counting my Florida income for my total Ohio taxable income. Why?

[efrost58]

I lived and worked in Ohio until May, and began a job in Florida in August. Florida does not have a state tax, however Ohio does. It is counting my entire years income as taxable for Ohio. Shouldn't it only count the Ohio income?

[DanielV01 · Accepted solution]

Ohio has a quirky way of calculating tax.  Ohio only has one state return, whether you are a resident, part-year resident, or a nonresident.  So what Ohio does is calculate how much it taxes all of your income, and then issues a credit against the tax that would have been assessed on income not earned in or taxable to Ohio.  Because of this credit, your Florida income is not taxed in Ohio, but is used to calculate how much tax you pay on your Ohio income.  Click on this link for an Ohio website that discusses this tax credit:  Determine Residency - Ohio Department of Taxation - Ohio.gov

[Hal_Al]

The credit is calculated as your non-Ohio income divided by Total adjusted Income multiplied by the total tax. TurboTax (TT)   does this by allocating your income as either Ohio or non-Ohio. W-2 income will be allocated by the state name abbreviation shown in box 15 of your W-2. TT will ask you, item by item, in the state section, how much of your other income is Ohio or non-Ohio income. Make sure that your FL wages show FL (Other state postal abbreviation)  in box 15 of your W-2 screen, with the FL amount in box 16.
This system allows Ohio to apply their highest tax rate, based on your total income, while only taxing your Ohio income.
Ohio has a nonresident credit allocation form.. IT NRC
<a rel="nofollow" target="_blank" href="http://www.tax.ohio.gov/portals/0/forms/ohio_individual/individual/2015/PIT_ITNRC.pdf">http://www.ta...>

[SCOGHLAN]

I'm having the same issue.  My daughter moved from Ohio to Florida on 6/1/2019.  TurboTax is calculating her Ohio tax on her Florida income.  I understand that Florida does not have a state income tax, however, she permanently changed her residence.  I don't understand how Ohio can be unjustly enriched by taxing her on the Florida income simply because there is no tax credit to offer.  

In addition, her husband is in the military.  He moved to Florida and changed his permanent residence as well.  yet, TurboTax is including all of his active duty military pay as Ohio income.  This is in contradiction to the Ohio Department of Taxation Ohio IT-1040 rules that state if a service member is a resident or non-resident and his income is for active duty military pay and earned outside of Ohio is a Line 26 or 27 deduction.  Yet, TubroTax is not considering it as a deduction.

[KarenJ2]

@SCOGHLAN

Her husband needs to enter in My Info section of TurboTax the date that he changed his state residency. He should only be taxed on the income he earned before his residency changed.

Please see more information with the below links:

What is my military state of residence

Military Spouses and State Taxes