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Help! Multiple states - Same state wages, but total is double my federal wage
Hello,
I am working completely remotely in MA for my employer based in CT, and I have an issue with wages being double-counted when doing my resident MA taxes.
Suppose my federal wage is $10000. My CT state wages is also reported as $10000 in box 16, and MA state wages is also reported as $10000 in box 16. However, when doing my MA taxes, TurboTax transferred total state wages of $20000, which is double of my actual wage of $10000. This makes TurboTax thinks I'm making double of what I actually make, and that I owe 2x the amount of the state tax to MA.
Applying tax credits also doesn't work because the tax was computed on the 2X amount, so even after the deductions I ended up owing more than expected.
When TurboTax asked me to transfer only the MA portion of the state wages (declaring the total amount as incorrect), it says that I could no longer e-file because I only reported MA source when other state sources are present.
Before we go further let me say that I have read the FAQ as well as similar threads:
Topic 1: "Troubleshooting common federal to state transfer issues"
- This article is for NY and NJ (not MA and CT), even though it mentioned that it can generalize to different state situations. However, I could not even see the "Income and Deductions Summary screen" and any indication that the correct amount is used when doing my resident MA tax return.
Topic 2: "Same income reported by two states"
- Many people were having the same issue but none were sufficiently addressed. The "workaround" that worked is manually editing the info in W-2, by zeroing some box 16. Is that even legal and correct? I thought we should enter W-2 as it is.
Topic 3: "MA state tax double counting income"
- This thread deals with MA and RI, but the person resolved it by editing W-2. Again, is this proper?
Topic 4: "How do I remove income doubling due to multi-state amounts in box 16 of my W-2?"
- This has solutions for NY v NJ, NY v Pennsylvania. But for MA and CT none of these steps seems to apply...
I believe the "interview screens" within Turbotax are dependent on the states as the software is programmed specifically for those states, for example, there is a solution for NY vs. NJ (per the FAQ), or even other state combinations. But there's really none for specifically MA and CT. Also, there is no way to "allocate" anything when doing the resident MA taxes.
So, my questions are:
- Is there a way to e-file the returns without modifying and editing the W-2?
- More importantly, is editing the W-2 in order to e-file the proper way to do it? Will it result in an audit? Will the state returns get rejected because the information doesn't match what's in their system? (e.g., the total state wages exceeds the reported amount)
- Tax professionals, how would you resolve this?
- Readers who have done it by modifying W2's in the past, how did it go for you?
Thank you very much.
