Work in KY and WV but live in WV

[Jnuckels]

I live in WV but work in WV and KY with two separate W2s.  I only had WV taxes withheld from both of my employers. TurboTax is saying I need to file a KY state tax return. Is this correct? If not what do I need to do to my WV return to include the taxes taken from my KY checks.  

[MindyB · Accepted solution]

No, you do not need to file a Kentucky tax return. There is a reciprocal agreement between Kentucky and West Virginia. That means you only need to file a tax return in your home state, as well as you will be exempt from withholding in the nonresident state (Kentucky). You don't need to file at all in Kentucky. ‌The only reason you would need to file in Kentucky when your only income is reciprocal W-2 wages is if your employer withheld tax to that state and you needed a refund. In the state interview, when you are asked if you made money in other states, answer "NO."

You will file just a West Virginia return and report your wages as if you had earned them there. When you enter the Kentucky W-2, the state box should be labeled WV. Note that you may have had KY local tax withheld.  You can't get a refund for them, but you can include them with itemized deductions.

Here is more information on reciprocal states: What is a state reciprocal agreement?