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Level 1
April 9, 2023
Question

Nonrisident state tax refund

I am an Indiana resident who works in Ohio. My payroll company took out Ohio taxes and for some reason my w4 stated I was an Ohio resident. I am getting part of my withheld taxes from Ohio, but not all. Why is this happening? How do I recoup all my withheld Ohio tax?

    2 replies

    Hal_Al
    Level 15
    Level 15
    April 9, 2023

     Ohio has a reciprocal agreement, on wages, with all neighboring states. No Ohio state taxes are withheld or due and you do not need to file an OH return. But your home state will tax you on your Ohio income.

    If Ohio state  tax is mistakenly withheld, you have to file an Ohio return to get a refund.  You should get back all of the Ohio withholding shown in box 17 of your W-2.

    However the reciprocity agreement does not apply to local city taxes. You are not required to file a local city return, 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.

     

    Most  IN counties (but not the state)  allow a credit, or partial credit for tax paid to an OH city. That will come up in the IN state interview. (For details, see:

    https://ttlc.intuit.com/community/state-taxes/discussion/i-see-no-separate-question-for-school-taxes...

    JohnB5677
    Alumni - Intuit
    April 9, 2023

    You may not be able to recoup the full balance of the Ohio taxes paid, but you can get a credit for them on your Indiana tax return; therefore, you won't be double taxed.

     

    Ohio has a reciprocity agreement with the five states that border Ohio. This includes Indiana. The reciprocity agreements provide that Ohio will not impose state income tax on the salaries, wages, tips and commissions of residents of those five states.

     

    Employees of these states that work in Ohio should complete the Ohio IT 4, Employee’s Withholding Exemption Certificate. Specifically, section III.

     

    If I've misunderstood your question, and this does not completely answer it, please contact us again and provide some additional details.

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