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Author Topic: Work in Ohio, resident elsewhere, state income tax?  (Read 8394 times)

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Offline TrueNorth

Temporary position in Portsmouth. Would I have to file an income tax return in Ohio and pay Ohio income tax?

I live in another state, own a house there and would return home once the job is finished.

Offline TrueNorth

Re: Work in Ohio, resident elsewhere, state income tax?
« Reply #1 on: Jan 21, 2012, 02:12 »
BTW, if anyone has experience with Portsmouth, I've posted some questions about the facility and the area in the Portsmouth section. Thanks.

Offline Already Gone

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Re: Work in Ohio, resident elsewhere, state income tax?
« Reply #2 on: Jan 21, 2012, 06:13 »
Unless your state has a tax agreement with Ohio, you would have your income taxes withheld in Ohio.  You would file an income tax return for Ohio and your home state.  Your home state will normally allow a credit for taxes paid to Ohio - usually up to the amount you would have paid to your home state on your Ohio income.

Example:  I live in New York.  If I work in Ohio, I would file a non-resident return to Ohio and a resident return in NY.  NY will tax me on all my income, but Ohio only on the income I earned there.  NY gives me a credit for the tax I pay to Ohio.  However, if I work in a state with a higher tax rate - like Massachusetts - NY will only allow a credit for the amount of tax that I would have paid on the MA income in NY.  Since MA has a higher tax rate, NY will not credit me for all the tax I pay to MA - just for the amount of tax that I paid to MA that is up to the amount I would have paid to NY on that same income.

In my working career, I have filed income tax returns to as many as seven states in the same year.  Every state is different.  Many do not require you to file a return at all if you did not earn above the threshold for filing.  However, in order to get any refund you may have coming, or to claim a credit in your home state for taxes paid elsewhere, you will have to file a return anyway.

The only way you can avoid having your Ohio taxes withheld in Ohio is if your state and Ohio have a mutual agreement - like the one between NY and NJ - which would allow your taxes to be withheld in you home state.  Very often, states which border each other have such agreements.
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Offline traveltax

Re: Work in Ohio, resident elsewhere, state income tax?
« Reply #3 on: Jan 30, 2012, 08:30 »
Temporary position in Portsmouth. Would I have to file an income tax return in Ohio and pay Ohio income tax?

I live in another state, own a house there and would return home once the job is finished.

I would add that regardless of thresholds, state revenue agencies are very aggressive these days in regard to asserting residency and assessing tax on unfiled returns, regardless of income. Eg- MO will assess residence tax if a W2 is mailed to a MO address.

As the other posters mentioned, outside of reciprocity agreements and a rare situation, you are taxed at residence and at the source of the income. Your resident state has the obligation to allow a credit for taxes paid to other states but if home state is higher, you make up the difference.

Also, OH has municipality/school district taxes that may come into play

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www.traveltax.com info@traveltax.com

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Re: Work in Ohio, resident elsewhere, state income tax?
« Reply #4 on: Feb 02, 2012, 05:15 »
Temporary position in Portsmouth. Would I have to file an income tax return in Ohio and pay Ohio income tax?

I live in another state, own a house there and would return home once the job is finished.
if your home state is pa, then you can go exempt from ohio taxes as there is a reciprocal agreement between those two states.
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Offline traveltax

Re: Work in Ohio, resident elsewhere, state income tax?
« Reply #5 on: Feb 02, 2012, 07:57 »
I would add that regardless of thresholds, state revenue agencies are very aggressive these days in regard to asserting residency and assessing tax on unfiled returns, regardless of income. Eg- MO will assess residence tax if a W2 is mailed to a MO address.

As the other posters mentioned, outside of reciprocity agreements and a rare situation, you are taxed at residence and at the source of the income. Your resident state has the obligation to allow a credit for taxes paid to other states but if home state is higher, you make up the difference.

Also, OH has municipality/school district taxes that may come into play



Except at the municipal level as  there is no reciprocity arrangement with those third tier taxes. If i could find a way to post an attachment, I could provide a pdf showing the 2011 reciprocity arrangements. One thing to keep in mind is if your income is as a contractor, not all the reciprocity arrangements hold. Many states distinguish between employment wages/salary and business income for these purposes
Joseph Smith EA/MS Tax
Enrolled Agent, Admitted to Practice Before the IRS
TravelTax TravelTax Canada
www.traveltax.com info@traveltax.com

 


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