Same income reported by two states

Forum|Forum|7 years ago
June 6, 2019
3 replies
3 views

I live in MA and work in RI. My w2 shows the same income reported for both states. All income is from an RI source. The w2 makes it appear as if I have MA income as well. My RI return is fine, but it says I cannot efile for MA. Is there a way around this so I can efile? Did I fill something out wrong?

Anonymous

You need to enter your W-2 just as it is written. If your W-2 does not show a line for taxes withheld from MA then the MA information should not be entered in your W-2 in Turbo Tax. If you have had income taxes withheld for both states then you will enter two state lines for the W-2.

mrobin1984Author

Level 2

My w2 was imported with both states listed individually and I did pay MA taxes on my RI income. The problem is with the MA return. It tries to transfer the amount for both states which would be double my income. I didn't have any income from an MA source, but it is reporting as such on the w2. If I leave the amount as is it says I owe on income I didn't have. If it only pulls over the amount listed as MA, it says I can't efile. Is TurboTax correct, do I need a corrected w2 or did I do a step wrong?

lapointejenna

Level 2

Were you a resident of both states during this year? Or are you a resident of one and a non-resident the other. If the second is true, then it should be fine to have reported income in both, but you should receive a credit for taxes paid in your non-resident state so you are not paying duplicate taxes. Make sure you answer the resident questions correctly. And if your employer has the wrong address of residence, that changes how they write up your W-2.

faeriestar123

Level 2

Guys, this is not a Turbo Tax problem. This is MA state problem. I am a paid tax preparer, who uses Drake Tax Software, and just encountered this issue for the first time myself. I did more research and found this info from Tax Act support, as well as confirmed it with my personal accountant. Here's what it says:

"The Massachusetts Department of Revenue informs us that this type of W-2 is compiled in error, and the recommended course of action is to request a corrected W-2 showing only the amounts in box 16 attributable to the state in which they are earned, not each state for which the wages are taxable.

If the employer will not issue a corrected W-2, there are several options available to complete your tax return reporting the correct amount of wages that are taxable to Massachusetts.

Option 1: (Paper filing only, E-File not allowed)

The first option to correct this issue is to make the adjustment reducing the amount of wages directly on Line 3 using the Wage Adjustment Field. Enter a negative adjustment in the amount of the wages that were duplicated on Form W-2. This will properly report the amount of wages taxable to Massachusetts. When using this option you are not allowed to E-File because Massachusetts will reject the return due to total wages in Box 16 of form W-2 being lower than the amount reported on line 3. See Massachusetts - Wage Adjustment for instructions on using this option.

Option 2: (E-File Allowed)

If you want to electronically file your return and cannot get a corrected W-2, you can adjust the amount of wages in Box 16 of Form W-2 to properly reflect the amount of wages that are taxable to Massachusetts. In this case you will need to manually make an adjustment to each state's box 16 so that the total wages reported in all Box 16s are equal to the total amount of state wages earned. When you make this adjustment, you should generally adjust the W-2 so that Box 16 for each state reflects the total amount of wages earned in each state. In addition, you will want to verify the correct amount is still reported on any other states that you may also be attached to your return."

So, this means the W2s are incorrect in this situation. They should not be reporting or withholding on any MA income. MA will still tax you on your full income, if only RI is reported, but not DOUBLE the income. Furthermore, you can then get a credit for the taxes paid on the full income to RI. I can see how this causes an audit. I suggest trying to get a corrected W2 first. If not, then we go with overriding the amount on the W2 and Line 3 on the MA return.

kongf2012

Level 3

Same issue here. Looks like this has been around for FOUR years!

Company would not issue corrected W2.

Does everyone just do the paper filing, or risk being audited by e-filing and changing W2 reported income for MA to 0 in box 16?

LenaH

Community Manager

No. You must fill out your W-2 as shown. As a resident of Massachusetts and an employee of Rhode Island, you will have to file a resident return for Massachusetts and a nonresident return for Rhode Island.

Your Massachusetts resident return will tax you on your entire income. Your Rhode Island nonresident return will tax you on the income you earned within their state lines. However, Massachusetts will give you a credit of tax paid to Rhode Island on your resident return.

The first thing you want to do is make sure you've filled out the Personal Info section correctly:

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

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

To ensure accurate calculations, always complete the non-resident (RI) return first because your resident state (MA) will give you a credit for taxes paid.

@kongf2012

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