Changed states, but only have W-2 for former state

[pj.cr...@gmail.com]

I have lived and worked in the same state, KY, for years. I moved to
OH in October 2006 and still work in KY, but my HR department did not
change my state withholding tax from KY to OH until spring of 2007.
Since my 2006 W-2 only referenced KY, I only filed a KY state return.
Now I understand that was a mistake, and I should have filed in both
states as a part-year resident.

To submit an amended KY return and a new OH return for 2006, I need to
know the portion of my adjusted gross income earned while residing in
KY and while residing in OH. What is the proper way to determine this?
Is it sufficient to take the adjusted gross income, divide by days in
the year, then multiply by days lived in KY and OH, respectively? Or
is there a formal process I should go through?

thanks for the help
--PJ

[Paul Thomas]

<pj.cr...@gmail.com> wrote

>I have lived and worked in the same state, KY, for years. I moved to
> OH in October 2006 and still work in KY, but my HR department did not
> change my state withholding tax from KY to OH until spring of 2007.
> Since my 2006 W-2 only referenced KY, I only filed a KY state return.
> Now I understand that was a mistake, and I should have filed in both
> states as a part-year resident.

Yup.

> To submit an amended KY return and a new OH return for 2006, I need to
> know the portion of my adjusted gross income earned while residing in
> KY and while residing in OH. What is the proper way to determine this?

You see.....you earned it all in KY.

You'll file a KY amended return showing that you were a part year
~~resident~~ but that all the income (or at least the wages) were KY income.

For OH, you file an original (there isn't a return to amend) showing a
part-year resident, reporting the income earned while an Ohio resident
(generally by the number of days/365, but see what their formula calls
for) - BUT - that the wages were KY wages. There should be a credit for tax
paid on your KY income while a resident of Ohio, so look for that else
you'll pay tax twice on the same income.

> Is it sufficient to take the adjusted gross income, divide by days in
> the year, then multiply by days lived in KY and OH, respectively? Or
> is there a formal process I should go through?

That's generally the rules, but you can also have specific allocation. See
what each state allows for.

--
Paul A. Thomas, CPA
Athens, Georgia

[Katie]

Ohio and Kentucky have a reciprocal agreement under which a resident
of one state working in the other is subject to state income tax on
salaries and wages only in the state of residence. Therefore, from
the time you became an Ohio resident, you should not have paid tax to
Kentucky on your earnings there, but should have paid tax only to Ohio
on that income.

How to prorate your wages depends on how you are paid. If you were
paid at a constant rate throughout the year, you can prorate by days,
weeks, or months. If your compensation changed during the year, you
should make a real cutoff. If you have your pay stub for the last pay
period during which you were a Kentucky resident, you can use the year-
to-date figures from that stub to separate the earnings.

You need to file an amended return with Kentucky as a part-year
resident and claim a refund of the tax you paid on your income
(including income from intangibles and any other income that was not
from a Kentucky source) earned after you became an Ohio resident. You
need to file an Ohio part-year resident to pay tax on your income
earned after you became an Ohio resident.

Katie in San Diego

The foregoing is intended for educational purposes only and does not
constitute legal or professional advice. Nothing contained herein is
intended to be used, or can be used, by any person to avoid penalties
that may be imposed under federal or any state law.

[pj.cr...@gmail.com]

Thanks Paul and Katie for your fast, helpful answers!

On Dec 31 2007, 7:36 pm, Katie <katiej_1...@yahoo.com> wrote:
> You need to file an amended return with Kentucky as a part-year
> resident and claim a refund of the tax you paid on your income

I'm hoping you also have some advice regarding my amended KY return.
For 2006 I submitted a standard KY Form 740, which is for full-year KY
residents. Per the instructions, one should file an amended return
using KY 740-X. However I now understand that I SHOULD have submitted
KY Form 740-NP, for part-year residents. Filing an amended return in
this case means submitting another KY 740-NP, and checking a box on
the form indicating "amended."

Submitting an amended KY 740 doesn't make sense to me, since that was
the wrong form to use in the first place. Any advice on how to handle
this?

PJ in Cincinnati