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 the taxpayers employer withheld income tax for the nonresident state, a nonresident return needs to be filed to claim a refund for the taxes paid. The taxpayer cannot claim a refund on the resident return for the taxes paid to another state.
Ohio Resident Return:
Complete the information required.
If the other state is Indiana;
- Add or Edit the Indiana Nonresident Return
- County Information - Complete the questions indicting taxpayer lived in Ohio and the county where the taxpayer worked.
- Return to Indiana Nonresident Return main menu;
- Indiana Reciprocal return (IT-40RNR) and answer the questions.
Please note that the taxpayer may still be subject to county tax on the income 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 the taxpayers employer.
If the other state is Kentucky;
- Add or Edit Nonresident Kentucky Return
- Basic Information
- Residency Information - Complete the questions indicting taxpayer is a resident of a reciprocal state.
- Form 740-NP-R - Complete for the taxpayer and separate one for the spouse (if applicable).
To claim exempt from Kentucky withholdings in the future, file form 42A809 with the taxpayers employer.
If the other state is Michigan;
- Add or Edit 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 the taxpayers employer.
If the other state is Pennsylvania;
- Add or Edit 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. 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 the taxpayer is a resident of a reciprocal state.
To claim exempt from future PA withholdings, file form REV-419 with the taxpayers employer.
If the other state is West Virginia;
- Add or Edit Nonresident West Virginia Return
- Basic Information.
- Special Nonresident Income for Reciprocal States
To claim exempt from future withholdings, complete form WV/IT-104 and file it with the taxpayers employer.
Note: The nonresident returns will refund all or most of the taxes withheld. The resident return will calculate an amount owed (usually). Review completed returns. Keep in mind the taxpayer cannot claim a refund on the resident return for the taxes paid to another state.
Additional Information:
Ohio State Tax Information
ProWeb: Which States does Indiana have a Reciprocal Agreement with?
ProWeb: Which States does Michigan have a Reciprocal Agreement with?