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Multi-state and part-year returns for people who moved, commuted or worked remotely
Two states can both want a piece of the same paycheck. We prepare the Indiana part-year and nonresident returns, the other state's return and the county tax, and claim the credits so each dollar is taxed once.
Moved during the year
The year you move, you're usually a part-year resident of both states. Each one taxes what you earned while you lived there, and the state you left may still tax income that came from a source inside it, such as rent from a house you kept.
For Indiana, that's Form IT-40PNR. The split usually starts with your move date, but pay periods, bonuses, and investment income paid around the move all need to be assigned to the right state. Getting that wrong is how people end up paying twice.
Live in Indiana, work elsewhere
Indiana's five reciprocal states
If you live in Indiana and earn wages in Kentucky, Michigan, Ohio, Pennsylvania or Wisconsin, those states agree not to tax your wages. You pay Indiana instead. Reciprocity covers wages only, not business or rental income.
Illinois isn't on that list, and neither are most other states. When you work there, you file a nonresident return in that state, and Indiana gives you a credit for tax paid to the other state on the same income. The credit has limits, so the order and the math matter.
Indiana county tax
On top of the 2.95% state rate for 2026, every Indiana county has its own income tax. The county you lived in on January 1 is the one that applies for the whole year, even if you moved in February.
Moved from Hamilton County to Marion County in March? You pay Hamilton County's rate for that year.
If you lived outside Indiana on January 1 but worked in an Indiana county, you may owe that county's tax as a nonresident. Employers often withhold the wrong county after a move, and we fix it on the return.
Remote work and business income
Working from home for an out-of-state employer usually means your wages are taxed where you sit, but a few states tax remote workers as if they worked in the office. Business owners with customers, employees or property in another state may need to file there and split income between states. We sort out which states can tax what before anything is filed.
What to bring
Crossing state lines
You file in both states: a return in the state that shouldn't have withheld to get that money back, and a return in the correct state to pay what you owe there. Then update your withholding form with your employer.
Yes. We have clients who file with us from other states. Everything works by phone, email and electronic signature.
Yes. Rental income from Indiana property is Indiana-source income, so you file an Indiana nonresident return. Your home state usually gives a credit for it.