For my wife and I, 2021 is complicated regarding how many states we need to file in. I purchased the Turbotax Premier desktop package plus 3 additional state filings with the understanding that the product would give us clear guidance on the filing process, but I’m not so sure about that. To summarize my situation:
- My wife and I started 2021 living in DE; then on 6/15/21 we sold our DE home and moved to NJ where we rent a home; we are married filing jointly
- I started 2021 working for a DE based firm; on 3/29/21, I changed to working for a NJ based firm; for the DE firm, no NJ tax was withheld (which I believe is correct since I lived in DE while working there); however, my NJ based firm only reported state wages and withheld state tax for NJ, but I lived and worked remotely in DE for about 2.5 months with them; I requested my employer provide me a corrected W2 showing my proper DE income, but they said they cannot because they don’t have a legal entity in DE
- From 1/1-1/6 my wife was not employed; she started employment on 1/7/2021 and worked from home 100% because her office in Philadelphia, PA was closed due to COVID, and remained as such for her entire time in 2021; On 11/1/2021 my wife transferred offices from Philadelphia to New York City, NY, but continued to work from home 100% out of convenience offered by employer due to COVID
- My wife’s employer reported income and taxes for DE, PA, NJ, NY, and Philadelphia
Questions:
- Where do we need to file tax returns? I see it is possible for DE, PA, NJ, NY, Philadelphia, and New York City. But considering my wife worked 100% remotely in 2021, perhaps some locations we don’t owe tax, but I don’t see any such option for that in Turbotax ;if we need to file in cities Philadelphia & New York City, I don't see such capability in the Turbotax Premier product based on the questions thus far
- Which states/cities can I deduct from others? And do I deduct the taxes that were withheld from our pay, or the tax basis we file, i.e., what Turbotax calculates as Tax required
- Do I need to report DE income from my NJ based employer, who didn’t indicate DE wages on my W2 (because I lived and worked remotely in DE with this firm part of the year)? If yes, appreciate any guidance on calculating DE wages and how to input into Turbotax
- My wife’s employer revised her DE state wages; is there a box or something to indicate the W2 is revised?
- Turbotax gives us an error/warning concerning our days worked outside NY can’t equal the total days worked; my understanding is the total days worked includes those worked remotely, so considering my wife never worked in NY they are equal and the error seems inappropriate; please comment
- NY business income allocation – we aren’t self employed, do we need to complete this?
I know these are a lot of questions, but any general guidance on these topics and filing would be appreciated.
