Lived and worked in Ohio. Then I moved to KY in March and still work in Ohio. Company only withholds Ohio tax.

[rachste422]

Lived and worked in Ohio. Then I moved to KY in March and still work in Ohio. Company only withholds Ohio tax. How do I pay Ohio taxes for three months and Kentucky taxes for 9 months? How do I get Ohio taxes back for the time I have lived in Kentucky?

[ToddL · Accepted solution]

You will have to file both KY and OH returns. The state tax interviews will allow you to allocate your income between the two states based on the amount of time you were a resident of each state. You should get a refund of OH taxes on the money earned after you moved to KY, and you will probably have to pay KY tax on the money earned after you moved to KY .

Ohio and Kentucky have reciprocal agreements. Your employer should be able to withhold KY taxes from your pay and not withhold OH taxes. You would need to contact the payroll department and submit IT-4NR.

[Sdmott]

Which KY return is filed in this situation? I have similar situation: worked all year in Ohio. Moved from Ohio to KY in March 2021. Employer withheld for Ohio during the time lived in Ohio and then withheld for KY after moving to KY. I believe I file part year for both Ohio and KY but not sure. Or do I file part year for Ohio and full year KY Resident since lived in KY for more than 183 days. So confused!

[Hal_Al]

The answer above is still correct.  Essentially the reciprocal state rules don't apply when you move from one state to the other.  You have to file a part year resident return for both states. Your employer did the withholding correctly so that will make it a little easier, but part year filing is always messy. Do the OH return first. 

For 2022 you will be a full year KY resident and reciprocity applies (you don't file OH for 2022). 

The reciprocity agreement does not apply to local city taxes. You are not required to file an OH city return (starting in 2022), but you are also not entitled to a refund of the city withholding (box19 on your W-2), unless there was an error in the amount. If you are subject to a KY county or city tax, you should check to see if the KY city will give you a credit for the OH city tax withheld. KY does allow an itemized deduction (Schedule A), on the state return,  for local tax paid.

[Sdmott]

I appreciate your quick response. I will file part year for both Ohio and KY. Thank you.