I moved from Pennsylvania to Ohio in 2022. Can Ohio tax wages earned in Pennsylvania before I moved to Ohio?

[MHH4]

I lived in Pennsylvania until June of 2022 when I moved to Ohio.  I worked for a Pennsylvania company until May of 2022.  In May I started working for a company in Ohio (still living in Pennsylvania).  In June I moved to Ohio and continued to work for the same Ohio company.  I used TurboTax to complete my Federal, Pennsylvania, and Ohio returns.  The Pennsylvania return only included wages and taxes withheld for the time I lived in Pennsylvania.  However, the Ohio return includes all wages from 2022, including wages I earned when living and working in Pennsylvania.  Is this correct?

I received three W-2 forms.  One from the Pennsylvania company and two from the Ohio company.  The Ohio company provided a W-2 that contained Pennsylvania wages and taxes withheld when I lived in Pennsylvania.  The second W-2 from the Ohio company contained Ohio wages and taxes withheld since I moved to Ohio.

The Ohio tax return brings in the Federal adjusted gross income from line 11 of Federal 1040.  This line includes all Income earned during 2022, including income while I lived in Pennsylvania.  My tax due is based on this income.  Shouldn't there be an adjustment that removes the Pennsylvania income?  If so, how do I correct TurboTax to remove the Pennsylvania income from the Ohio return?

[MaryK4]

First, make sure you entered Part Year resident for Ohio.  Next look for the screen below- this is where you allocate your Ohio wages.  

[Hal_Al]

Q. Can Ohio tax wages earned in Pennsylvania before I moved to Ohio?

A.  No.  But, that's not what's happening.  It only appears that way. 

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 PA  in box 15 of your W-2 screen, with the PA 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.

Q. Shouldn't there be an adjustment that removes the Pennsylvania income?  

A.  Yes.  Instead of an adjustment or deduction, OH uses  the credit described above. 

Ohio has a nonresident credit allocation form, IT NRC.

https://tax.ohio.gov/static/forms/ohio_individual/generic/PIT_ITNRC.pdf

As an aside, be aware that the reciprocity agreement, on wages, between OH &PA only applies to full year residents. So. it does not apply in your case .

[TomD8]

"As an aside, be aware that the reciprocity agreement, on wages, between OH &PA only applies to full year residents. So. it does not apply in your case."

I don't think that's correct.  See this from the PA tax website:

If you are a part-year resident, Pennsylvania taxes you on the following kinds of income from PA sources:
Compensation. Pennsylvania taxes part-year residents on compensation for services performed in Pennsylvania, unless you are a resident of one of the reciprocal agreement states (Indiana, Maryland, New Jersey, Ohio, Virginia, or West Virginia). If you are a resident of a reciprocal agreement state, your Pennsylvania employer should withhold and remit the tax to that state.

https://revenue-pa.custhelp.com/app/answers/detail/a_id/267/kw/Ohio%20reciprocity/session/L3RpbWUvMT...

[MHH4]

I do see that my Ohio return does have a credit on line 9.  Looking at the schedule of credits, it is listed as a "Nonresident Credit" for the time I lived in Pennsylvania.  Thank you 1