Frequently Asked Questions

The Ohio Department of Taxation has compiled a list of frequently asked questions covering many different categories.

To view the questions, click on the "Select Category" bar and then click on the category you are interested in.  A list of questions will appear pertaining to that category. Then click on the question you are inquiring about and the answer will appear.

I have an employee working in Ohio that lives in a state that borders Ohio. Must I withhold Ohio state income tax from their wages?

Ohio has a reciprocal agreement with the five states that border Ohio. These five states   are Indiana, Kentucky, Michigan, Pennsylvania and West Virginia. The reciprocal agreements provide that Ohio will not impose state income tax on the salaries, wages, tips and commissions of residents of these five states. Employees of these states that work in Ohio should complete the Ohio IT 4NR, Employee’s Statement of Residency in a Reciprocity State, and file that form with their employer.

Note: The reciprocity agreements do not apply to compensation paid to Ohio nonresident investors that hold a 20% or more interest in a pass-through entity, where the pass-through entity has nexus in Ohio. This compensation is reclassified as a distributive share of income and is not considered wages (please refer to the instructions for the Ohio IT 1040 for more information on this topic).