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Robin D.
Robin D., Senior Tax Advisor 4
Category: Tax
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Experience:  15years with H & R Block. Divisional leader, Instructor
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I have a new job in florence KY. I am moving in jan 12. I have

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I have a new job in florence KY. I am moving in jan 12. I have a choice to stay either in Lawrenceburg Indiana or cincinnati ohio or florence ky all within 20 miles to job.

If we just talk about overall money saving( income tax wise). I am married no kids. Which one will be the best economical state/town to live in?

104K/YR-INDIANA INCOME TX 2%, KY 6 %, OH 5.4%

I know IN and KY has reciprocal tax agreements. Does that mean if i live in indiana and work in ky i just pay 2% on my 104k or do i have to pay to KY as well?

Hello and thank you for using Just Answer.

If two states have a reciprocal agreement and an individual lives in one of those states and works in the other, the individual will only be subject to the income tax in the state where he lives. So if you live in Indiana or Ohio then you would need to file the following form so no tax was withheld in KY:
http://revenue.ky.gov/NR/rdonlyres/B4282E1B-D5FA-4B5F-90DB-33F7952DE974/0/42a809.pdf

You see KY has a reciprocal agreement with both the states so if you choose to live in either of those instead of KY you will just be taxed in your resident state. This does not mean that your company will withhold for your resident state automatically so you need to check with them to see if they will withhold.

Customer: replied 5 years ago.
how about county taxes. so just say YES or NO that i will be charge indiana income tax (2 %) ?

The county tax rates change for many counties at end of 2011 so here so here is a link to the explanation on the different counties. You can look up your county.

http://www.in.gov/dor/files/dn01.pdf

Yes, you would should pay income tax to Indiana if you lived there and worked in KY.

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