ans2139
New Member

My employer previously incorrectly deducted taxes for 1 pay period in DC, when I was living in MD. They have issued me a W2-C. How do I file my state returns correctly?

For the first pay period of 2018, my employer paid me and deducted taxes in DC, when they should have done so in MD. The rest of the year, my taxes were correctly deducted in MD. I originally received a W2 for the state of MD and a W2 for DC. My employer has now sent me a W2-C, which "corrects" the state wages and state income tax that was previously reported in DC, to be reported in MD. 

First, do I need to file a non-resident refund request to DC? To get the taxes paid incorrectly to DC back? 

Second, how do I report the income and taxes paid in MD? The W2-C would suggest that I report the "corrected" income and taxes, which include the one pay period that was actually paid to DC. Or do I only report the income and taxes that were ACTUALLY paid to MD? 

TomD8
Level 15

State tax filing

If you were a full-year resident of MD, ALL your income is taxable by MD.  So you report the W-2C that includes the "DC" portion.

File DC Form D-40B to obtain a refund of any incorrectly withheld DC taxes.  Here's a link:

https://otr.cfo.dc.gov/sites/default/files/dc/sites/otr/publication/attachments/2018%20D-40B.pdf   

**Answers are correct to the best of my ability but do not constitute tax or legal advice.
ans2139
New Member

State tax filing

Would I report the taxes that were paid to DC, as being paid to MD? (Which is what the W2-C says?) The W2-C's "correct information" moves the taxes I paid in DC to being paid in MD. And I don't know if I report that information, or if I simply report the taxes I did originally pay to MD.
TomD8
Level 15

State tax filing

I would report your W-2C exactly as is, because the IRS is going to get a copy and is going to match it to your return.  Presumably your employer corrected it to reflect the actual situation.  
**Answers are correct to the best of my ability but do not constitute tax or legal advice.