State taxes

Forum|Forum|4 years ago
April 18, 2022
2 replies
21 views

I live in Ohio and did some work in Kentucky last year (2021). I made $12,732 in Kentucky and paid $721 in State and local tax. Shouldn't I receive all of that money back by using the 740-NP-R form? I was not asked that when doing my taxes on TurboTax. Your help is appreciated!!

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Best answer by DanielV01

You will get back KY State taxes but not local taxes. Those are not a part of the reciprocal agreement. For your local Ohio return, your locality may give you a credit or a partial credit for the taxes you pay to the KY locality.

DanielV01Answer

Level 15

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dstace58Author

Level 2

Thank You!!

Hal_Al

Level 15

Q. Shouldn't I receive all of that money back by using the 740-NP-R form?

A. Yes, you can claim a refund of the amount in box 17 of your W-2 (KY state withholding). The amount in box 19 (local city or county withholding) is not refundable.

KY has a specific form (740 NP-R ) for a reciprocal state refund. Rather than paying TurboTax for KY software, you should try filing that form by hand. It looks pretty simple.

If your KY income was something other than W-2 wages, you cannot get a refund and must actually file a KY tax return.

Ohio has a reciprocal agreement, on wages, with all neighboring states. No state taxes are withheld or due and you do not normally need to file a return for the other state (MI, PA, KY, WV, IN). But OH will tax you on your other state income.

If other state taxes are mistakenly withheld, you then have to file a return, for the other state, to get a refund. OH will not give you a credit. You should ask your employer to stop withholding so you don't have to file a (MI, PA, KY, WV, IN). return every year.

However the reciprocity agreement does not apply to local taxes. You can not get those refunded, but if you live in an Ohio city with an income tax, they may give you a credit or partial credit. Many do. You need to check with your city.

If you are subject to Ohio School District Income Tax (SDIT), you can not get a credit, for KY local taxes withheld, on an SDIT return.