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I moved to Florida in May from Ohio. I have to pay state income tax for Ohio income, however it is counting my Florida income for my total Ohio taxable income. Why?

Forum|Forum|7 years ago
June 6, 2019
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I lived and worked in Ohio until May, and began a job in Florida in August. Florida does not have a state tax, however Ohio does. It is counting my entire years income as taxable for Ohio. Shouldn't it only count the Ohio income?

TurboTax Deluxe Online

Best answer by DanielV01

Ohio has a quirky way of calculating tax. Ohio only has one state return, whether you are a resident, part-year resident, or a nonresident. So what Ohio does is calculate how much it taxes all of your income, and then issues a credit against the tax that would have been assessed on income not earned in or taxable to Ohio. Because of this credit, your Florida income is not taxed in Ohio, but is used to calculate how much tax you pay on your Ohio income. Click on this link for an Ohio website that discusses this tax credit: Determine Residency - Ohio Department of Taxation - Ohio.gov

DanielV01Answer

Employee

Ohio has a quirky way of calculating tax. Ohio only has one state return, whether you are a resident, part-year resident, or a nonresident. So what Ohio does is calculate how much it taxes all of your income, and then issues a credit against the tax that would have been assessed on income not earned in or taxable to Ohio. Because of this credit, your Florida income is not taxed in Ohio, but is used to calculate how much tax you pay on your Ohio income. Click on this link for an Ohio website that discusses this tax credit: Determine Residency - Ohio Department of Taxation - Ohio.gov

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Hal_Al

Employee

The credit is calculated as your non-Ohio income divided by Total adjusted Income multiplied by the total tax. TurboTax (TT) does this by allocating your income as either Ohio or non-Ohio. W-2 income will be allocated by the state name abbreviation shown in box 15 of your W-2. TT will ask you, item by item, in the state section, how much of your other income is Ohio or non-Ohio income. Make sure that your FL wages show FL (Other state postal abbreviation) in box 15 of your W-2 screen, with the FL amount in box 16.
This system allows Ohio to apply their highest tax rate, based on your total income, while only taxing your Ohio income.
Ohio has a nonresident credit allocation form.. IT NRC
<a rel="nofollow" target="_blank" href="http://www.tax.ohio.gov/portals/0/forms/ohio_individual/individual/2015/PIT_ITNRC.pdf">http://www.tax.ohio.gov/portals/0/forms/ohio_individual/individual/2015/PIT_ITNRC.pdf</a>