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RAB30
Returning Member

Employer withheld the wrong state taxes

I lived in Kentucky and worked in Ohio for the first three months of 2021 before moving out of state. My employer incorrectly withheld state taxes for Ohio when they should have withheld Kentucky state taxes.  Doing my KY returns, it looks like I haven't paid anything for the 3 months I lived there and worked in Cincinnati.  I understand KY/OH have a reciprocity agreement where I shouldn't have to pay OH state taxes (only local taxes for Cincinnati where I worked).
 
Questions:  What do I do for my Kentucky returns since nothing was withheld (guessing I just have to eat the full cost and underpayment penalty)?  What should I do or what do I need to file to get all of the incorrectly withheld OH state taxes refunded (example - would I file an OH state return as a non-resident with income of $0 to receive the refund of taxes, or is there a different form in TurboTax Premier CD product)?
I want to make sure I'm doing this correctly.
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2 Replies

Employer withheld the wrong state taxes

Kentucky

Kentucky has reciprocity with seven states. 

make sure your employer starts withholding for KY.  you may want extra withheld since evidently there was no w/h in 2022 for KY - this is to avoid penalties when you filrin 2023

Ohio

You can submit exemption Form IT-4NR to your employer if you work in Ohio and are a resident of Indiana, Kentucky, Michigan, Pennsylvania, or West Virginia.

https://tax.ohio.gov/static/forms/employer_withholding/generic/wth_it4nr.pdf 

RAB30
Returning Member

Employer withheld the wrong state taxes

Hi @Mike9241,

Thanks for replying!  I might have left some details off that are pertinent to the question.  Below are some additional details.

 

  • I moved out of Kentucky and left that job mid-month in March 2021, so this should be the last time I need to file KY taxes (shouldn't have to deal with KY vs OH withholdings any longer)
  • Former employer previously had my Form IT-4NR on file from prior years when I started working there in 2018, however, looks like they incorrectly reverted it to OH after there was a mix-up in where I was working remotely from (temporarily worked remotely while staying with family in WA before deciding to move)

I definitely appreciate the suggestion to redo the Form IT-4NR, but I believe the tax issue should no longer occur and I'm just trying to make sure I file correctly for the ~3 months I resided in KY and worked in OH.  Do I need to file for OH as well as KY?  Or is there something else I should do to make sure I do those taxes for this partial-year period correctly?

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