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