Wrong automatic entry on the state withheld

[pajakdwiina]

I live in New York state but get W-2 income from Maryland. When I scan the W-2 for the federal tax, the turbo tax entered the state withheld as New York, rather than Maryland.

When I working on the state of Maryland in the Turbo Tax, I able to manually change the state withheld on the form 505 (nonresident), However, when I working on the New York State at the Turbo Tax I am not able to change the amount into zero. Please help. Thank you

[AmyC]

You need to correct the w2 in the federal section to show MD as the state with taxes and income. Go back to federal income, edit your w2.  You should only show one line on your w2 for the state section, MD. The program will pull all income into NY automatically.

[pajakdwiina]

I work remotely from New York,  and my W2 is from Maryland. Box #15 should be NY or MD? and Box# 17 is belong to which state?

[VolvoGirl]

What state is in box 15 on the actual W2?  If you're not sure ask your employer.

[pajakdwiina]

Dear Sir/Madam

I do really appreciate if I can call you, please provide the phone number to reach you

I am working remotely from New York state since july 2013 and my Box # 15 always MD, and filled nonresident tax for MD and resident for NY.  However starting the 2022 tax year my Box #15 is NY. I asked my employer told me "Per Central Payroll, the withholding was for NY and sent to NY.  Due to the amount of employees living and working in other states, this is the first year CPB has made the change to remit the taxes to the appropriate entity.  They wwe not remitted to MD."

When I finished federal (W-2 upload via pdf), and start the Maryland return, I am surprised that I have to pay tax in the amount almost the same as Box#17 while NY state I will get refund slight larger than than of Box# 17.  It seems something wrong, based on the TurboTax for Maryland tax for nonresident is 1.25%. 

I do really appreciate if you can help please.

The next questions, how about the previous taxes return that I had submitted since 2013 where Box #15 always MD.

Thank you very much

[TeresaM]

If you live in New York state, and you are physically in New York while you work remotely for a Maryland company, then your payroll department was correct to put New York in Box 15 of your Form W-2 and withhold state taxes for New York. This income will be taxed where the work was performed, even if the company is in a different state.

So, unless you did perform work in Maryland for part of the year, or have other Maryland based income, such as rental or business income, you should not have to file a Maryland return.

If this does not completely answer your question, please do provide us more details, so we may better assist. 

If you still wish to contact TurboTax Live phone support, this TurboTax Help article has the best way, depending on which version of TurboTax you use. 

[pajakdwiina]

Good morning Theresa,

No, I do not perform work in Maryland for part of the year nor have other Maryland based income.

1. OK good, that means the W2 is correct. Thanks for the conformation

2. When I upload the W2 form in the federal tax, it seems that I have to fill nonresident income from Maryland

3. After finish start the Maryland 505 form,  In the turbo tax "Maryland Wage Income" and I click the "Learn More"  it says "If you are a nonresident who works in Maryland and/or derives other income from a Maryland source, you are subject to Maryland's income tax rated as well as the special nonresident tax rate of 1.15%.

Does this statement does not apply to me because I do not have any part time work in maryland nor other business, 100% working from New York.

4. Should I put 0 in the wages from maryland source? in the Turbo Tax Deluxe?

5. How about the previous years (2013 to 2021) back then the W2 is box #15 was MD.  Should I submit an amandement of my return? How long it can be go back? only three year?

Thank you

Pajakdwiina

[Cynthiad66]

Since you uploaded your W-2 and it is asking for Maryland income, I suggest you delete the W-2 and choose to type the information in yourself.  Print the W-2 so you will have the information accurate to enter your information.  Delete that W-2 and here is how.

1. Open or continue your return.
2. From the menu, select Search and type-in W-2.
3. Select the Jump to link in the search results.
4. On the Your W-2 info so far screen, select Edit next to the W-2 you want to change.
5. Select the trash can Delete icon to delete the W-2.

Re-enter, by typing it yourself, the W-2 as it is from the company.  Maryland should not pop-up at all.  You do not need to file a Non-resident return.  

[pajakdwiina]

1. Thank you for the information, I will enter W-2 manually.

2. How about the previous years?, I work 100% from New York since 2013, However,  my W-2 box #15:  MD since  2013.  Since 2013, I have submitted resident tax for NY state and nonresident for MD.

    a. Should I request the employer to revise the W-2 at least for the last three years so I can submit an amend return

     b. If the employer won't revise the W-2, any suggestions ? 

Thank you

[AmyC]

1. Yes, you need to enter your w2 manually.

2a. You can ask for a corrected w2 but first you should verify that you should amend your return. See MD instructions for prior years.

The problem is state tax laws are changing continuously. Between telecommuters and Covid, each year will need to be researched, if necessary. TeresaM is correct that the wages will be taxed where earned. As a NY resident, you will have NY tax.  She also states you may need to MD return if you have MD income. Some states tax you for having received income from a source in their state while others claim you must have been in the state. Each state is different. MD does not consider days worked in MD, only the source of income.

For  2022, the MD nonresident instructions state on page 1: In general, you must file this return if: 

• You are a nonresident of Maryland, 

• AND, you are required to file a federal return based upon the income levels in Table 1 or 2, 

• AND, you received income from sources within Maryland.

Therefore, you need to open the link and see if you are required to file based on your income and filing status.

2b. If the employer will not correct the w2, you can still file an amended return and enter the explanation in the reason for amended return.

[pajakdwiina]

Following you suggestions, I have remove the W-2 and manually enter the data.

Again after finish the federal, it says on the state return, recommended states: Maryland and New York

[RobertB4444]

Since the W2 was corrected for 2022 to show New York as the state that you reside and work in you do not have to file a Maryland tax return anymore.  For 2022 do not fill out or file a Maryland return.  Maryland does not tax remote workers not doing any work in Maryland.  

You will file a New York resident return and pay taxes to New York.  The withholding for New York should take care of that.

The system wants you to file a Maryland return because when you entered your personal information it asked you if you performed any work in a state other than New York and you said yes and entered Maryland.  Go back and change that to 'No'.

You do not need to amend any returns.  You sorted out the withholding in prior years by getting it back from Maryland and paying taxes to New York.  Now you don't have to do that anymore which is good.  But you already fixed the prior years.  Leave them alone.

@pajakdwiina 

[pajakdwiina]

Dear Amy and RobertB4444,

I am confuse now, it seems conflicting information. When I read the link for State of Maryland given by Amy, I have to fill out the nonresident for Maryland. 

Thank you

pajakdwiina

[HopeS]

I hope this will not confuse you any further. 

Since you are a resident of NY and a non-resident of MD. In order to get the proper credit you should complete the non-resident MD  return before you do your home state NY return so that the credit flows properly. Since you are a resident of NY, ALL your income is taxable by NY, regardless of where you earned it.  So you must file a NY tax return.

You won't be double-taxed, because NY will give you a credit for the taxes you pay to MD.

In the personal info section of TurboTax, enter NY as your State of Residence, and indicate that you had Other State Income from MD.  

Steps:

1. With your return open, select My Info in the left-hand menu.
2. Then, on the Personal info summary screen, scroll down to Other State Income, and select Edit.
3. At Did you make money in any other states? the question, answer Yes, and make sure your nonresident state(s) are selected from the drop-down.
4. Select Continue to return to your Personal info summary.

After you finish your federal return, you'll automatically move to the State tab, where you'll see your nonresident state(s) listed in addition to your resident state.

Tip: To ensure accurate calculations, always complete the non-resident return first if filing in multiple states because your resident state might give you a credit for any taxes paid in that situation.

When completing the Maryland return, you will enter the MD-sourced income. You get full credit for the taxes withheld from NY. Complete the Interview by responding to each question. See Screenshots as an examples

@pajakdwiina 

[pajakdwiina]

Dear Ms. Hope S

Thank you very much for your clarification:

Yes, Indeed that I did.

a. I filled the federal

b. fill nonresident of MD first

c. Fill as resident of NY

The results: I will get a big refund (i.e. X) from NY but I owe a big amount (i.e., XX)

 The amount of X nearly the same as XX, the X slightly larger than XX.

 Because I owe a big amount to MD, I will have to pay underpayment too (included in the XX).

you informed: "When completing the Maryland return, you will enter the MD-sourced income. You get full credit for the taxes withheld from NY. ", 

questions:

 - I am not sure I got the full credit as you mentioned.

- Am I doing right?

Thank you