How to File file Form IT-40PNR

[moriej32]

I lived in Kentucky, but worked in Indiana. When I was laid off I received unemployment from Indiana. I'm getting a rejected return saying:

"While unemployment compensation from Indiana sources received by an Indiana nonresident is not subject to tax in Indiana, you must file Form IT-40PNR to claim a refund of ANY Indiana state/county withholdings."

I had money withheld for taxes from my unemployment from Indiana. I've also stated I've been a full year resident of Kentucky and a non-resident of Indiana. So how do I get TurboTax to populate Form IT-40PNR? 
@AnnetteB6 
@DanielV01 

[DanielV01 · Accepted solution]

To file IT-40PNR, you will want to set up first that your home of residence is Kentucky, and that you did not work in any other states.  Even though you physically did work/receive unemployment from Indiana, because of the KY/IN reciprocal agreement, you are considered to have not worked in Indiana for this purpose.  

When you get to the Indiana return (and select it if it does not pre-populate for you based on the other information you've entered into the program), you want to make sure the option for Special Nonresident, or Reciprocal Nonresident is selected.  This will generate the form you need and you will claim the refund there.

If that produces a diagnostic, you can go back to the beginning of the Indiana Return interview and select the Nonresident Return instead (which is "officially" the IT-PNR form).