Work in California, company in Ohio

[kstormy90]

I recently started a full time position  in Jan 2022 for a company based in Cleveland, Ohio. I currently live in Southern California. My W2 states that I am a california resident, but on my paystub they are deducting state taxes for CA, Ohio, and also a city tax for Cleveland. 

Should these taxes be deducted since I am a California resident and am not a resident of Cleveland Ohio and therefore am not benefiting from the taxes in that state? 

[MayaD]

No, if you didn't live or work in OH, you shouldn't pay any OH taxes.

To receive a refund, you would file a nonresident OH state return, and report that none of your income came from working in that state.

[kstormy90]

So these Ohio income taxes will be automatically deducted from my check and I have to file non-resident tax return to get that money back? It's not simply a matter of the employer not deducting them from my check because I don't live in Ohio?

[ThomasM125]

For 2021 you will have to file a tax return in Ohio to account for the income reported to that state. You can talk to your employer about suspending withholdings going forward.  

Sometimes your wages are taxable even though you don't work in the state, especially if you are working from home at the convenience of your employer. This has come about due to Covid in many instances. Employers make you work from home, and even if that is in another state, you still get taxed in the state where you would normally being working. It can apply on the city and local level as well.

If your W-2 lists wages taxable in a state, the state will assume those wages were earned in the state and it is usually not possible to treat them otherwise without getting an amended W-2.

The good news is you can get a credit for those taxes on your resident return where you live. Look for the credit for taxes paid to another state option on your state tax return in TurboTax.