Nonresident

[Knowledgequeen]

If I live in Kentucky but work in North Carolina, why do I owe such a large tax to Kentucky and North Carolina where I am not a resident gives me my money back

[KeshaH]

Because you worked in North Carolina, you would typically owe North Carolina tax on the income you earned within the state. You'd need to indicate how much of your income was earned inside of North Carolina.

Since you live in Kentucky, you have to pay income tax there - even if you don't actually work in the state. If your job didn't withhold any Kentucky income tax from your pay, you will have the balance that you're seeing on your Kentucky return.

The good news is, if you do have to pay tax to North Carolina, Kentucky will give you a credit for those taxes paid. This credit will lower the amount of tax owed to Kentucky.

The best option for 2025 is to have Kentucky income tax withheld from your paycheck to avoid having a balance due when you file your tax return next year.

[Hal_Al]

You say "North Carolina, where I am not a resident, gives me my money back".

NC should not be giving you back all your NC withholding, unless your total NC wages was very small.

[TomD8]

Also, be sure in TurboTax that you complete the non-resident state tax return first, before you do your home state return.  Otherwise the program will not compute the "other state credit" properly.

[SteamTrain]

@Knowledgequeen 

After your Federal tax return is filled out (every scrap), 

1)......you must FIRST, go thru the NC nonresident tax return to determine exactly how much NC withholding that NC keeps.

)....only then go thru the KY interview.  somewhere in there KY will allow you a credit for the taxes that NC kept....which is why you have to go thru the NC non-resident interview first.

_________________

If you didn't  go thru the NC non-resident interview first (and error checked), you need to go back and re-step thru the entire NC interview again (and error checked), then The KY interview afterward (and error cehcked).