Solved

I live in Michigan and work in Toledo, OH. What do I need to do with regards to taxes?

Forum|Forum|6 years ago
June 5, 2019
3 replies
0 views

On W-2 State field says OH. Did taxes get taken out at OH rate, not MI? I work in Toledo, can I get city tax credit through my MI State Taxes? If so, how does that work? May have an underpayment penalty, how do I verify that?

TurboTax Deluxe Windows

Best answer by Hal_Al

Ohio has a reciprocal agreement, on wages, with all neighboring states. No Ohio state taxes are withheld or due and you do not need to file an OH return. But your home state will tax you on your Ohio income.

If Ohio taxes are mistakenly withheld, you have to file an Ohio return to get a refund. You should ask your employer to stop withholding so you don't have to file an Ohio return every year. If box 15 of your W-2 has OH and there is an amount in box 17, there was OH state withholding. However if there is OH in box 15 and boxes 16 & 17 are blank but there are entries in boxes 18-20, OH is only shown to identify the state of the city tax withholding. You do not need to file an OH state return.

However the reciprocity agreement does not apply to local city (Toledo) taxes. You are not required to file a local city return, but you are also not entitled to a refund of the city withholding (box 19 f the W-2), unless there was an error in the amount. But, Michigan will give you credit for that on the state return, but you have to attach a copy of the city return. So, even though the Ohio city does not require you to file a return, you have to file one (or, at least, prepare one) to get the MI credit, even though there will be no tax due or refunded from the Ohio city.

Hal_AlAnswer

Employee

Ohio has a reciprocal agreement, on wages, with all neighboring states. No Ohio state taxes are withheld or due and you do not need to file an OH return. But your home state will tax you on your Ohio income.

If Ohio taxes are mistakenly withheld, you have to file an Ohio return to get a refund. You should ask your employer to stop withholding so you don't have to file an Ohio return every year. If box 15 of your W-2 has OH and there is an amount in box 17, there was OH state withholding. However if there is OH in box 15 and boxes 16 & 17 are blank but there are entries in boxes 18-20, OH is only shown to identify the state of the city tax withholding. You do not need to file an OH state return.

However the reciprocity agreement does not apply to local city (Toledo) taxes. You are not required to file a local city return, but you are also not entitled to a refund of the city withholding (box 19 f the W-2), unless there was an error in the amount. But, Michigan will give you credit for that on the state return, but you have to attach a copy of the city return. So, even though the Ohio city does not require you to file a return, you have to file one (or, at least, prepare one) to get the MI credit, even though there will be no tax due or refunded from the Ohio city.

S

slb4everyours

How do I enter this in Turbo Tax? I input my Toledo and Maumee taxes withheld and Turbo Tax says I am not eligible for a tax credit. Also, can I attach my city return and still efile in Michigan?

A

Ash_Phoenix77

Turbo tax has made this very difficult and very simple at the same time.

When you are filing for your state refund. In the "Take a look at Michigan credits and taxes" section, under "Other credits". Start, "Other State Tax Credit." Answer yes to, "Qualify for other state credits?" This is where it got me because you assume you want to look for the state of Ohio to select. However, you need to select "City/county/locality outside of Michigan" at the top of the drop down menu, then hit continue. Then next screen type in OH Toledo for "Local Government". Next screen type in the amount in box 19 on you W2, in the box "Tax paid to OH Toledo (US $). Then click continue. You are now credited the amount you paid to Toledo.

Hope that helps.

A

awojnow

I want to confirm: If I follow the steps you list in turbotax for the credit of the Toledo city taxes on my Michigan return is there still a need to print and mail copies to MI state?

E

ErnieS0

Yes. Michigan says, "Include a copy of the return filed with the other government unit(s) with your MI-1040. If you do not include the return file with the other government unit(s) when claiming this credit, processing of your return may be delayed or your credit may be denied."

@awojnow see page 10 of the MI-1040 instructions

**Say "Thanks" by clicking the thumb icon in a post**Mark the post that answers your question by clicking on "Mark as Best Answer"

S

SB04

What if the person is a Michigan resident but Rossford local taxes are reflected on the W-2. What RITA forms need to completed/filed?

Hal_Al

Employee

The reciprocity agreement, between MI & OH on state taxes, does not apply to local city taxes. You are not required to file a local city return, but you are also not entitled to a refund of the city withholding (box19 on your W-2), unless there was an error in the amount.

Michigan will give you credit for OH city tax paid, on the state return, but you have to attach a copy of the city return. So, even though the Ohio city does not require you to file a return, you have to file one to get the MI credit, even though there will be no tax due or refunded from the Ohio city.

Rossford is a RITA city, so you file with them. You can file at the RITA web site or get the forms to fill out.

http://www.ritaohio.com/

Theoretically, you can do a RITA form in TurboTax, but you will have to pay for the OH software and it ain't easy, as you have to navigate the OH state software to get to the city software.

T

Taxpayer6817

I really don't want to throw a wrench into this discussion as it is confusing what MI really wants. I logged into the MI tax site last week and posed this question: "A question about line 18 on MI-1040. The instructions say that I need to include a copy of the return I file with the entity outside of MI that withheld taxes with my MI-1040, but that entity (City of Toledo) does not require that I file a return. What do I do?"

Here's the answer they sent me: "To confirm any taxes imposed by government units outside of Michigan, please submit a copy of your W-2(s) showing withholdings paid to the City of Toledo. Thank you for using the Michigan Department of Treasury online self-service website."

So do we believe that we actually don't have to include a copy of a Toledo income tax return with our MI return or not?!!