Ohio has reciprocity agreements with Indiana, Kentucky, Michigan, Pennsylvania and West Virginia. Under these agreements, the income earned in these states for Wages and Salaries is taxable to Ohio and should be included on the Ohio return.
If your employer withheld income tax for the nonresident state, a nonresident return needs to be filed to claim a refund for the taxes paid. You cannot claim a refund on the resident return for the taxes paid.
The credit for taxes paid to another state is automatically calculated in your account when you add a Nonresident return to your already created Resident Ohio return.
What do I need to do?
If you qualify for the reciprocal agreement, you will need to remove the automatic calculation by logging into your account and visit:
- State Section
- Ohio Resident Return
- Complete the information required
If the other state is Indiana, go to:
- State Section
- Indiana Nonresident Return
- County Information
- Complete the questions indicting you lived in Ohio and the county where you worked. Go to Indiana Reciprocal return (IT-40RNR) and answer the questions.
Please note that you may still be subject to county tax on the income you earned while a nonresident. According to Indiana Informational Bulletin #33, 'Indiana reciprocity agreements do not affect withholding requirements concerning the Indiana County Adjusted Gross Income Tax (CAGIT), County Economic Development Income Tax (CEDIT), or County Option Income Tax (COIT).' TaxSlayer does not automatically calculate this amount.
To claim exempt from Indiana withholdings on future returns, complete form WH-47 and file it with your employer.
If the other state is Kentucky, go to:
- State Section
- Nonresident Kentucky Return
- Basic Information
Go to the Residency Information and complete the questions indicting you are a resident of a reciprocal state. Complete one form 740-NP-R for the taxpayer and one for the spouse (if applicable). To claim exempt from Kentucky withholdings in the future, file form 42A809 with your employer.
If the other state is Michigan, go to:
- State Section
- Nonresident Michigan Return
- Residents of Reciprocal States
- Enter the wages for Michigan as a negative. To claim exempt from future withholdings, file form MI-W4 with your employer.
If the other state is Pennsylvania, go to:
- State Section
- Nonresident PA return
- Adjustments to Income
- Reciprocal State Wage Adjustment
- Enter the wages as a negative number
Pennsylvania requires proof that taxes were paid to the other state. You must print and mail the PA return along with a copy of the Ohio state return, the W-2(s) with the PA income and a statement explaining you are a resident of a reciprocal state. To claim exempt from future PA withholdings, file form REV-419 with your employer.
If the other state is West Virginia, go to:
- State Section
- Nonresident West Virginia Return
- Basic Information.
Complete the section for Special Nonresident Income for Reciprocal States. To claim exempt from future withholdings, complete form WV/IT-104 and file it with your employer.
NOTE: The nonresident returns will refund all or most of the taxes withheld. The resident return will calculate an amount owed (usually).