Part Time Ohio Resident

[byugrad84]

Help- Im confused. I moved from Ohio to Arizona in June.  My income is pretty much 50/50 in each state, however,whenI print my ohio tax form, it is showing that its taking my total income earned to determine my ohio state taxes. I do not see anywhere that it asksme to split my income by state. I have made sure that my W-2's and my 1099's are entered properly by state.   Am I doing something wrong?  Where do I look?

[JamesG1]

You believe that you are part-year Ohio and part-year Arizona?  Do the W-2’s show the correct states in box 15 of the W-2’s?  See here.

What kind of 1099 income are you referring to?  Was it earned in one state or the other?  Or both?

Ohio tax is computed on total income (OH & AZ).  This number is then multiplied by a percentage based on non-Ohio income compared to Ohio adjusted gross income. 

It can be disconcerting to see this if you do not follow what is going on.

[byugrad84]

The 1099's are split by state- I have 2 pension 1099's and 3 401K 1099s.

[Hal_Al · Accepted solution]

Ohio does a convoluted tax calculation for non-residents/part year residents. It calculates tax on total income, then it calculates a non resident/part year resident credit, which it subtracts from the tax it calculated on the total income. 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 non-Ohio wages show AZ (Other state postal abbreviation)  in box 15 of your W-2 screen, with the AZ 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.

[miltharris]

I had almost the identical issue for 2022 since I moved from AZ to OH midyear. It was alarming and illogical to see my entire Federal AGI as my taxable Ohio AGI. I should have looked here first to understand. The Turbotax agent I spoke with didn’t have a clue! Once I saw the big non-refundable OH tax credit I was calmer and assured Turbotax had calculated correctly, and that Ohio just had an odd way of calculating my part-year resident tax.