What to do if my employer refuses to supply a corrected W-2

[jojo221]

This is for my 2021 W-2. I recently received a tax notification saying I owe tax to IL. My job location was in OK but I worked remotely in IL for entire 2021. My employer reported my income from the company to both states on my W-2. Thus, I was double taxed. When I filed the state taxes, I filed as a residency of IL and put the tax amount to OK as "credit paid to another state" in IL's tax file. But now I was told based on the taxable income for IL on W-2, I cannot take the "credit to another state" and should pay the full amount. I contact my employer to explain that I lived in IL for entire 2021, so my state of residency is IL, and I pay tax to IL. As OK does not use the Convenience of Employer rule, I don’t owe tax to OK. Thus, the taxable income on W-2 for OK should be 0, and I only owe tax for IL. But they refuse to correct the W-2 because they claimed that my work location was OK and it was me chose to work in another state and they tax employees based on their job location on paper. What should I do? Contact IRS?

[Critter-3]

Ok ... if they withheld any OK taxes then you will file a non resident OK return to get it back since none of the income belongs to OK. 

Then all the income is taxed to IL and since you owed nothing to OK  you cannot get a credit for any taxes paid to OK since you paid none.   In the TT program you should have completed the OK return first then the IL return so the proper credit would have been calculated which in your case it is nothing. 

[TomD8]

You worked in Illinois all of 2021, but is Illinois your permanent, primary home (your domicile in tax terminology), or were you in Illinois temporarily while maintaining your domicile in Oklahoma or some other state?

[jojo221]

IL is my permanent state as I filed the tax with the residency of state in IL

[jojo221]

Thanks! But the problem is that I already completed the tax file for both states. How should I correct the one for OK? I filed IL state tax as resident and OK as non-resident.

[TomD8]

Since you lived in Illinois all year, you were correct to file your Illinois return as a resident.  But is Illinois your main, permanent home, or do you have a home in another state?

The issue is this: even though you lived in Illinois all year, if you were there temporarily while your main home was in Oklahoma, then your income would be taxable by both states.  That's why I'm asking.

[Critter-3]

AMEND the OK return to indicate none of the income belongs to OK.

[jojo221]

The W-2 put my total income to box 16 for both states. If I file the amendment for OK return saying that none of the income belongs to OK, will they accept that? My company refuses to correct the W-2 to reflect ZERO income in OK.

[Critter-3]

If they don't accept the amendment then you will have the opportunity to explain what happened to them just like you did here. Since you have to mail in the amended return you can send a note stating your position with the amendment.  

[jojo221]

Thank you, Critter!