My husband and I live in KY, but my husband works in Indiana, I work in KY. They are reciprocal states. KY state taxes were taken out of his pay, no Indiana state taxes were taken, but local Indiana county taxes were taken. When I start my federal return, what should I answer when asked if he earned income in another state? I have seen different answers throughout the discussions. Do we need to file an Indiana state return even if no Indiana taxes were taken out?