I live in Indiana and work in Kentucky. I noticed the Credit for Non-Indiana Local Taxes boxes. Do I need to fill this out from my w2 or does TurboTax already?

[cryrichter94-gma]

Does TurboTax automatically calculate this when filling the reciprocity agreement?

[DanielV01]

You have manual entries to make.  The reciprocal agreement between Indiana and Kentucky does not cover the local taxes (reported in Boxes 18-20).  For your Indiana return, follow these Instructions:

1. Open up your Indiana Resident Return Interview, and begin navigating through the interview
2. You will click Continue until arriving on the Your County of Employment Screen
3. For County of Employment, scroll all the way to the end, and select Out Of State-Kentucky
4. Continue your Indiana Return until arriving on Take a Look at Indiana Credits and Taxes
5. Under Personal, home and family credits, select Start on Credit for Non-Indiana Local Taxes

You will then be asked the following questions on the next screens:

• Credit for Non-Indiana Local Tax?  Select Yes.
• Non-Indiana Locality name:  Enter the name of the locality.  (Examples:  Louisville, Dayton, Flint)
• Non-Indiana Local Wages:  Enter what is reflected on the W2 in Box 18 for the locality
• Non-Indiana Local Taxes:  Enter what is on the W2 in Box 19 for the locality. 

Note:  Where multiple localities are involved, add the total of all taxes withheld and the corresponding income taxed.  Only add the box 18 income amounts when they are separately taxed.  In instances where 2 or more localities are taxing the same income (which can happen in certain districts of Louisville, for example), report the box 18 income once, but add the box 19 taxes withheld.