Work in Indiana, Live in Ohio: Tax Filing Guide

Reciprocity basics

How does Indiana-Ohio reciprocity work?

Ohio has reciprocity agreements with the five states that share its border, Indiana, Kentucky, Michigan, Pennsylvania and West Virginia: Ohio residents do not report wages earned in those states as taxed there. Indiana's reciprocity partners are Kentucky, Michigan, Ohio, Pennsylvania and Wisconsin.

Under reciprocity, Indiana does not impose its adjusted gross income tax on the salaries, wages, tips and commissions of Ohio residents who work in Indiana. The Indiana Department of Revenue sets out these rules in Information Bulletin #33, which cites IC 6-3-5-1. Income from other sources, such as self-employment, partnership income, rental property or gambling winnings, is still subject to Indiana tax. If you have Indiana income beyond wages, you file Indiana Form IT-40PNR instead of the IT-40RNR.

Filing returns

Which tax returns do you file?

Report all of your wages on your Ohio IT 1040 as a resident. For 2026, Ohio Revised Code 5747.02, as amended by House Bill 96, taxes nonbusiness income up to $26,050 at zero and income above that at $332 plus 2.75% of the excess. Ohio has no standard deduction but allows a personal exemption that depends on modified adjusted gross income. For 2025 the amounts were $2,400 (MAGI of $40,000 or less), $2,150 ($40,001 to $80,000) and $1,900 ($80,001 to $749,999); Ohio indexes them each year and may not lower them, so the 2026 amounts are at least that. For 2026, no exemption is allowed once MAGI reaches $500,000.

The Ohio IT 1040 and school district return are due April 15. Ohio has no extension request form but honors the IRS extension, which moves the filing date to October 15.

You also file Indiana Form IT-40RNR, the reciprocal nonresident return, to figure and pay Indiana county income tax. It is for full-year residents of Ohio and the other reciprocal states whose only Indiana income is wages, salaries, tips or commissions. The IT-40RNR for 2025 was due April 15, 2026; the return for 2026 wages follows in spring 2027.

Stopping Indiana withholding

What forms stop Indiana state withholding?

File Indiana Form WH-47, Certificate of Residence (State Form 9686), with your Indiana employer. It shows Ohio as your state of legal residence, and Information Bulletin #33 says a qualified nonresident employee who works in Indiana must give the employer a properly completed WH-47. Do not send it to the Indiana Department of Revenue; the employer keeps it. The WH-47 notes that the employer remains responsible for withholding any applicable Indiana county tax.

Ohio withholding depends on your employer's ties to Ohio. Every employer maintaining an office or transacting business within Ohio must withhold Ohio income tax, and must withhold school district income tax for employees who live in a taxing school district. An Indiana employer with no Ohio presence is not required to, although Indiana encourages employers to withhold for the state where the employee lives. If your employer withholds Ohio tax, you give it Ohio Form IT 4.

If no Ohio tax is withheld, Ohio expects quarterly estimated payments on Form IT 1040ES when your Ohio tax after credits and withholding will be more than $500, as it is in the example below.

Indiana county tax

How does Indiana county income tax apply?

Indiana's reciprocity agreements do not cover local income taxes. Information Bulletin #33 says employees from reciprocal states are subject to local income tax in the same way as residents of other states, and employers must withhold it if the employee's principal place of employment is in an Indiana county on January 1.

For someone who lives outside Indiana, the county is fixed on January 1: if your principal place of work on that day is in an Indiana county, you owe that county's local income tax on your Indiana wages for the year. If you did not work in Indiana until after January 1, you are not subject to county tax that year, and later changes of workplace county only count from the next January 1.

Rates come from the Indiana Department of Revenue's Departmental Notice #1. For 2026 they run from 0.5% (Porter) to 3.0% (Randolph). Counties along the Ohio line include Allen at 1.59%, Wayne at 1.25%, Randolph at 3.0%, Jay at 2.5%, DeKalb at 2.13%, Steuben at 1.99%, Union at 2.75% and Dearborn at 1.4%. The notice was reissued for periods from October 1, 2026, and only Boone County changed. On the IT-40RNR you report the wages earned in Indiana, and exemptions are not allowed when figuring county tax.

If you work in Indiana for 30 days or less in a calendar year, withholding is not required when the employer has a time and location reporting system, and you can claim the exemption from county tax on Form WH-4AFF.

Ohio credit for county tax

Does Ohio credit Indiana county taxes?

Ohio's resident credit on the IT 1040 covers income tax paid to another state or the District of Columbia, and for this credit a state means only the 50 U.S. states, not a city or other local government. Indiana county income tax is a local tax, so Ohio does not credit it on the state return.

This makes the Indiana county tax an extra cost on top of your Ohio tax. For a worker in Allen County at 1.59%, the county tax on $55,000 of wages is about $875.

If you live in an Ohio city with its own income tax, Ohio law lets a city grant residents a credit for tax paid to another municipal corporation, in Ohio or elsewhere. An Indiana county tax is not a municipal tax, so ask your city tax office whether its ordinance gives any credit for it.

Worked example: Ohio resident earning wages in Allen County, Indiana

Single filer, all work in Allen County (principal place of work on January 1, 2026), no other income. Ohio 2026 tax $332 plus 2.75% over $26,050; exemption $2,150 (the 2025 indexed amount for MAGI of $40,001 to $80,000, which the 2026 amount cannot be lower than). Ohio city and school district taxes not included. Approximate, not tax advice.

Ohio local taxes

Do Ohio municipal and school district taxes apply?

Ohio has two local income taxes, and they work differently:

• Municipal income tax. A city taxes its residents on income from whatever source earned, and it also taxes nonresidents who work in the city. As a resident of a taxing city, you owe your city's tax on wages earned in Indiana too. If your Indiana employer withholds no Ohio city tax, you file with your city and must make estimated payments once the amount due is at least $200.
• School district income tax. It applies only to residents of a taxing school district; nonresidents are not subject to it even if they work in the district. Rates are set in quarter-percent steps, and the 2025 IT 1040 booklet lists about 200 taxing districts with rates from 0.25% to 2%. If you lived in a taxing district for any part of the year, you may need to file Ohio Form SD 100.

Ohio's Tax Finder at thefinder.tax.ohio.gov looks up the municipal and school district taxes for your address.

Withholding errors

What if your employer withheld Indiana state tax by mistake?

If your employer withheld Indiana adjusted gross income tax despite your WH-47, you can recover it by filing Indiana Form IT-40RNR (if your only Indiana income is W-2 wages) or Form IT-40PNR (if you have other Indiana-source income). Either form will show zero Indiana state tax owed, and the withholding is refunded to you by Indiana.

Check your first pay stub of the year to confirm no Indiana state tax is withheld. If it is, give payroll a new WH-47 in writing. Amounts already withheld come back only through the Indiana return.

Do not claim Indiana state withholding as a credit on your Ohio return. Recover it directly from Indiana.

Remote work

What if you work remotely from Ohio for an Indiana employer?

For state income tax, remote days do not change your filing obligation. Under reciprocity, Ohio taxes all of your wages as a resident and Indiana does not tax them, whether you work at the Indiana office or at home in Ohio.

County income tax is different. The IT-40RNR asks for the wages, tips, salaries and commissions earned in Indiana, taxed at the rate of the county that was your principal place of work on January 1. If your principal place of work on January 1 was your home in Ohio, you skip the county tax lines for that year, and a worker who never works in Indiana has no Indiana wages to report.

On a hybrid schedule with an Indiana principal workplace, only the wages for Indiana workdays belong on the form. Keep a record of your Indiana workdays and check how your employer allocates wages.

Mid-year move

What happens if you move between the states during the year?

If you move from Ohio to Indiana during the year, you become a part-year resident of both states. Ohio uses the IT 1040 with the nonresident credit on Schedule IT NRC for income earned while a nonresident of Ohio. Indiana uses Form IT-40PNR for part-year residents and nonresidents.

Reciprocity covers only the part of the year you were an Ohio resident. After you become an Indiana resident, Indiana taxes your income at the 2.95% state rate for 2026. For county tax, both the county of residence and the county of principal employment are fixed on January 1, so a new Indiana county of residence applies from the following January 1.

Document your move date with a lease, property records, updated driver's license and voter registration, and give your employer a new Indiana Form WH-4 after moving. This is general information, not tax advice.