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Wrong state

I LIVE in the state of Indiana city of Jeffersonville. I WORK in Louisville, Kentucky, which is about a 25 to 30 minute drive across the bridge. My job had my employee address set to an address in Wisconsin so I paid Wisconsin state taxes, and Kentucky. What do I do

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2 Replies
MindyB
Expert Alumni

Wrong state

Your payroll department shouldn't have been withholding taxes for Wisconsin or Kentucky, because both of these states have a reciprocal agreement with Indiana.  Please see Which states have reciprocal agreements? for more information and  a link to 42A809 to provide to your payroll department so they cease Kentucky withholding.

 

In order to receive a refund, you will prepare a non-resident tax return for both Wisconsin and Kentucky.  You will report $0 source income to them, and receive all of the tax withheld back as a refund.  Then, you will prepare Indiana as a resident, and report all of your income to Indiana.  You will likely owe Indiana since your employer withheld tax for the other states.

Hal_Al
Level 15

Wrong state

Your payroll dept. apparently had you living in WI  which is reciprocal with IN but not KY.

 

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.  https://revenue.ky.gov/Forms/740-NP-R.020521.pdf

 

The reciprocal agreement does not apply to city or county tax.  If you paid tax to Louisville, you cannot get that refunded.  

Most  IN counties (but not the state)  allow a credit, or partial credit for tax paid to a KY city or county. That will come up in the IN state interview. (For details, see:

https://ttlc.intuit.com/community/state-taxes/discussion/i-see-no-separate-question-for-school-taxes...

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