You can't fix what wasn't withheld. Your W-2 at the end of the year reports what actually happened, not what should have happened.
As stated by @TomD8 , you don't owe tax to NY.
Your immediate actions are:
- File a new W-4 to correct your federal withholding. You may have been over-withheld, depending on your spouse's income. You can use the IRS withholding calculator to determine how to set your W-4 for the rest of 2024, but remember to run the calculator again in January to correctly set your withholding for 2025. https://www.irs.gov/individuals/tax-withholding-estimator
- File an IL-2104.1 with NY to declare non-residency and set your withholding to zero.
- File a W-4VT to start Vermont withholding. https://tax.vermont.gov/individuals/personal-income-tax/withholding
- Make an estimated tax payment to Vermont to cover the taxes that should have been withheld. Making an estimated payment will help reduce or eliminate any penalty for not having enough withholding for the first part of the year. https://tax.vermont.gov/individuals/estimated-income-tax
Then at tax season you will,
- File a normal federal return.
- File a NY non-resident return reporting zero state income, this will give you a refund of all the withheld taxes.
- File a VT resident tax return. You may be under-withheld and owe a tax payment with your return. If VT wants to assess a penalty, you can try applying for a waiver for cause.
