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alliejohnson86
New Member

Need to file two returns in one state (nonresident and part-year residency)?

I was living in Kentucky in the beginning of 2016, while working for a company in Ohio. In March of 2016, I moved to Ohio, while still working for the same company. How would I file taxes for Kentucky and Ohio? I have since moved to Illinois (as of October 2016) if that makes a difference. Based upon what I have read, it looks like I would need to file as a nonresident and part-year resident of Ohio, but I can't seem to get that to work. It will only let me file one return per state.
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Accepted Solutions
DanielV01
Expert Alumni

Need to file two returns in one state (nonresident and part-year residency)?

It depends.  There are some states (NJ being one) that does require you to file both a part-year and a nonresident return for the same tax year.  Ohio does not do this, however, so all of your income you earned working in Ohio is taxable in Ohio.  (Normally KY and OH are reciprocal, but reciprocity is cancelled when it is a part-year return).  Because of tax rules and how the programming works, I would file this way:

  1. KY nonresident return.  It is true that technically you file a part-year return to KY, but this will be accurate for a couple of reasons.  In the first place, KY calculates your tax the same for a Nonresident or a Part-Year Resident.  Second, since you were likely paying (or should have been paying) KY tax on this income, this will represent your situation tax-wise accurately.  Although the reciprocal rules are not in effect, Ohio gives you a credit for the tax you pay to KY for the income earned in the "reciprocal" situation.  Third, it is very difficult to get TurboTax to do three part-year returns.  The easiest way to get this to work is to claim one state nonresident if you can justify it, and in this case, you can.
  2. Ohio part-year return.  Use Jan. 1 as your residency start date and your move to Illinois as your move-out date.  Make sure that you are credited for taxes you paid to KY on the income "earned" there.
  3. Illinois part-year return.  This you would have done for Illinois regardless.

Here is an FAQ to assist you with the preparation of the nonresident return:  https://ttlc.intuit.com/replies/3302052

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5 Replies
DanielV01
Expert Alumni

Need to file two returns in one state (nonresident and part-year residency)?

It depends.  There are some states (NJ being one) that does require you to file both a part-year and a nonresident return for the same tax year.  Ohio does not do this, however, so all of your income you earned working in Ohio is taxable in Ohio.  (Normally KY and OH are reciprocal, but reciprocity is cancelled when it is a part-year return).  Because of tax rules and how the programming works, I would file this way:

  1. KY nonresident return.  It is true that technically you file a part-year return to KY, but this will be accurate for a couple of reasons.  In the first place, KY calculates your tax the same for a Nonresident or a Part-Year Resident.  Second, since you were likely paying (or should have been paying) KY tax on this income, this will represent your situation tax-wise accurately.  Although the reciprocal rules are not in effect, Ohio gives you a credit for the tax you pay to KY for the income earned in the "reciprocal" situation.  Third, it is very difficult to get TurboTax to do three part-year returns.  The easiest way to get this to work is to claim one state nonresident if you can justify it, and in this case, you can.
  2. Ohio part-year return.  Use Jan. 1 as your residency start date and your move to Illinois as your move-out date.  Make sure that you are credited for taxes you paid to KY on the income "earned" there.
  3. Illinois part-year return.  This you would have done for Illinois regardless.

Here is an FAQ to assist you with the preparation of the nonresident return:  https://ttlc.intuit.com/replies/3302052

**Say "Thanks" by clicking the thumb icon in a post
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alliejohnson86
New Member

Need to file two returns in one state (nonresident and part-year residency)?

Thank you, this helps! Will I want to fill out the section about "Taxes on income in other states" and enter my income from when I was living in KY when filling out the Ohio part-year return?
DanielV01
Expert Alumni

Need to file two returns in one state (nonresident and part-year residency)?

Yes.  That will assist you in filing the way I suggest, so that Ohio credits you for the taxes paid to KY on that income.
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alliejohnson86
New Member

Need to file two returns in one state (nonresident and part-year residency)?

But do not fill out a credit in the KY return for "Credit for tax paid in another state"? I'm assuming it would be one or the other, not both?
DanielV01
Expert Alumni

Need to file two returns in one state (nonresident and part-year residency)?

Correct.  Only in Ohio. This is because you are claiming KY as nonresident.  Numbers wise this works.
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