To fill out the Ohio IT NRC, you report each category of your federal income in Column A, enter the portion sourced to Ohio in Column B, divide your non-Ohio income by your Ohio adjusted gross income to produce a four-digit decimal, and multiply that fraction by your Ohio tax to arrive at the nonresident credit. The completed form attaches to your Ohio IT 1040, and the credit lands on line 37 of the Ohio Schedule of Credits.1Ohio Department of Taxation. 2024 Ohio Schedule of Credits The idea is simple: Ohio taxes your full income first, then gives back the share tied to earnings from elsewhere, so you aren’t taxed twice on the same dollars.
Before You Start
Pull the current-year form from the Ohio Department of Taxation’s individual income tax forms page. Each tax year has its own version, so confirm you have the right one.2Ohio Department of Taxation. Ohio IT NRC Forms
Have these records in front of you:
- Your federal return. Column A of the IT NRC mirrors your federal income by category, and your Ohio AGI on line 16 comes straight from IT 1040 line 3.
- W-2s, especially any showing Ohio wages or Ohio withholding, plus a count of days worked in Ohio versus total workdays.
- 1099s for Ohio contract work, Ohio royalties or rent, and retirement distributions.
- Schedule K-1s from any partnership, S corporation, or LLC doing business in Ohio, which identify the Ohio-apportioned share.
- For part-year residents, lease agreements, closing statements, or utility records that fix the exact move-in or move-out date.
- A copy of the return filed with your home state. Ohio may ask for it to verify the credit.
Section I: Allocating Income Between Column A and Column B
Section I is where most of the work happens. Lines 1 through 8 and lines 10 through 14 each have two columns.3Ohio Department of Taxation. 2024 IT NRC Ohio Nonresident Credit Calculation Form Column A is the total from your federal return for that category. Column B is the amount of that total sourced to Ohio.
Wages (Line 1)
Column A shows all wages from every employer. Column B shows only wages earned while you were physically working inside Ohio. Allocate either by identifying the specific services performed in Ohio or by using the ratio of Ohio workdays to total workdays. A remote worker who never set foot in the state puts zero in Column B even if the employer is Ohio-based.
Business Income (Line 5)
Line 5 is a carry-in from Section II, covered below. If you hold a 20% or greater interest in a pass-through entity, the Ohio-sourced share of your distributive income runs through the apportionment calculation rather than being reported with wages.
Rent, Royalties, Gambling (Lines 3, 4)
Rent and royalties are sourced to the state where the property sits, so Ohio rental income appears in Column B. Lottery and casino winnings from Ohio games belong in Column B regardless of where you live.
Interest, Dividends, Nonbusiness Capital Gains (Lines 2, 10)
Interest, dividends, and gains on intangible property are generally allocated to the state of domicile. For a nonresident, Column B for those lines is typically blank. Capital gains on Ohio real estate are the main exception and do belong in Column B.
Pensions and Retirement (Line 11)
Federal law under 4 U.S.C. ยง114 bars states from taxing the retirement income of nonresidents, so if you no longer live in Ohio, leave Column B blank for pension and qualified retirement distributions from former Ohio employers.4Ohio Department of Taxation. Income – Retirement Income Stock option payouts and nonqualified deferred compensation generally do not count as retirement income for this purpose and may still be Ohio-sourced depending on where the services were performed.
The Fraction and the Credit (Lines 16-20)
Line 16 is your Ohio AGI from IT 1040 line 3. Line 17 totals your Ohio-sourced income from Column B. Line 18 subtracts line 17 from line 16, giving you the non-Ohio portion. Line 19 divides line 18 by line 16 and carries the result to four decimal places. That decimal, applied to your Ohio tax on line 20, is your nonresident credit.3Ohio Department of Taxation. 2024 IT NRC Ohio Nonresident Credit Calculation Form The credit cannot exceed your Ohio tax liability.5Ohio Legislative Service Commission. Ohio Code 5747.05 – Tax Credits
Section II: Apportioning Multistate Business Income
If you run a business that operates in Ohio and at least one other state, Section II calculates the Ohio share. Three factors drive the formula: property located in Ohio versus everywhere, payroll paid in Ohio versus everywhere, and sales to Ohio customers versus everywhere. Property and payroll are each weighted 20%, and sales 60%.6Ohio Department of Taxation. Ohio IT 2023 – Instructions for Allocating and Apportioning Income Multiply the resulting percentage by net business income, and carry the product to line 5 of Section I.
If a factor has a zero denominator because you own no property anywhere, for example, the weight shifts proportionally to the remaining factors so the three still total 100%.
Common Mistakes
The error that costs taxpayers the most money is putting income in Column B that lacks a real Ohio source. Overstating Ohio income shrinks the credit and overpays the tax. The opposite error, understating Ohio income to inflate the credit, triggers an assessment later. Column A must match your federal return exactly; divergences get flagged. Part-year residents who fail to cleanly split income between the resident and nonresident periods tend to receive follow-up notices that delay the refund.
Attaching the IT NRC to Your Return
The IT NRC is never filed by itself. It rides along with your IT 1040 as a supporting schedule, and the credit from line 20 flows to line 37 of the Ohio Schedule of Credits.1Ohio Department of Taxation. 2024 Ohio Schedule of Credits
Electronic filing through OH|TAX eServices walks you through the fields, or your third-party tax software imports them automatically.7Ohio Department of Taxation. OH|TAX eServices – File Now Paper filers should place the IT NRC directly behind the IT 1040 in the envelope. Mail returns with no payment to Ohio Department of Taxation, P.O. Box 2679, Columbus, OH 43270-2679. Mail returns with payment to P.O. Box 2057, Columbus, OH 43270-2057. Most refunds issue within 60 days, though the Department asks that you allow up to 120 before contacting them.8Ohio Department of Taxation. Ohio Individual and School District Income Tax Refunds
Fixing an IT NRC After You File
If you spot an error after submitting, file an amended IT 1040 rather than the old IT 1040X, which only applies to tax years before 2016.9Ohio Department of Taxation. Income – Amended Returns Check the amended-return box at the top of page 1, attach a corrected IT NRC, and include a revised Schedule of Credits. OH|TAX eServices accepts amended returns for free and processes them faster than paper.
When You May Not Need the IT NRC at All
A few situations change whether the form applies to you.
If you live in Indiana, Kentucky, Michigan, Pennsylvania, or West Virginia and your only Ohio income is wages or salary, Ohio’s reciprocity agreements let you file Form IT 4NR with your Ohio employer to stop Ohio withholding entirely.10Ohio Department of Taxation. Employer Withholding11Ohio Department of Taxation. Ohio Form IT 4NR Statement of Residency With no Ohio tax withheld and no other Ohio-sourced income, you file nothing in Ohio. If Ohio tax was already withheld before you turned in the IT 4NR, file the IT 1040 with the IT NRC to recover it as a refund. Reciprocity only covers wages, so Ohio business income, rental income, or gambling winnings still require the IT NRC.
Civilian spouses of active-duty servicemembers can elect, under the Military Spouses Residency Relief Act, to use the servicemember’s domicile, the spouse’s own domicile, or the servicemember’s duty station as their tax residence.12Ohio Department of Taxation. Military A spouse who elects a non-Ohio state treats Ohio-earned wages as nonresident income and uses the IT NRC to calculate the credit.
Full-year nonresidents whose only income comes from outside Ohio do not need to file an Ohio return at all, and therefore do not need the IT NRC.