I am helping my adult son with his taxes. He lived in Illinois Jan - May of 2023 and earned W-2 income from an Illinois company. He lived in Ohio from June - Dec 2023 and earned other income from an Ohio source. While completing the Ohio state TT taxes module, it is pulling the Illinois W-2 income from the federal Form 1040. There is nowhere I can find that is allowing us to remove that portion of the income. In the Ohio module, there is a section titled "Income Allocations" that allows us to designate which portion of "other income" was earned in Ohio and which portion of "nonbusiness interest and dividend income" was earned in Ohio, but nowhere do we have the option to allocate the full W-2 income to Illinois and not Ohio. The Illinois state module allowed us to designate all of those earnings to Illinois, but this did not affect Ohio. Any suggestions? Thanks in advance!
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One additional note, in the Ohio module, going to forms, I located Form IT NRC (Ohio IT NRC - Ohio Nonresident Credit Calculation). Line 1 shows the federal amount of the W-2 income from Illinois (column A). There is a blank under the "Ohio Amount" (column B). When I enter "0" under the Ohio amount - nothing changes and the full amount is still getting taxed in Ohio.
I am not sure if the program is the issue or the way OH taxes is confusing you. When you go through the program, the first screen asks about allocations with the nonbusiness interest you mention. The second screen shows w2 wages total and you enter the portion of wages for just Ohio. There is a big difference between OH gross income and OH taxable income. Here are screen shots to show the difference in wages and how it shows on the OH return.
For the w2 causing issues, does it only list IL income in the state boxes? Ohio calculates tax as if you are a full year resident and then prorates it.
Reference:
@AmyC The issue was my lack of understanding about how Ohio computes their taxes. The program is good and I have worked it out - thanks for your help.
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