It depends: If you are using the OH city tax to itemize federal (state and local tax) or to file OH city returns, the information needs to be added. Otherwise, it isn't necessary to enter the information and should have no effect on your KY state.
Ohio cities tax for working in that location. There is no credit in KY for the OH city tax. You may fill out a form with your employer so that they withhold KY and not OH tax. The localities may require withholding for your working there.
See Which city tax returns can I do in the TurboTax state program?
Because Ohio and KY are reciprocal states, they have an agreement that when you work in one and live in the other, you are only taxed where you live.
- If Ohio state taxes were withheld, you will file an Ohio nonresident reciprocal return to get these taxes returned to you.
- Kentucky is taxing all of your income. Because of the reciprocal agreement, you will not need the credit for tax paid in Ohio because you will get all of that back.
- Local taxes are not a part of the reciprocal agreement, and KY localities only tax you when you work in that locality, so there is no credit to claim for your Ohio local taxes.
You should take a look at your KY and see why adding the OH cities is reducing your refund. To see your forms:
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