Q. Is it OK to split my incomes into two states even I have only one state W-2? My biggest concern is if it's Ok to have a discrepancy between my AZ wage allocation in my AZ State filing and the number of AZ wage in line 16 of W2.
A. Yes, it's O.K. Because that is the accurate way to do. That said, there is some risk that a red flag will be raised at AZ Dept of Revenue. Some tax experts would advise that you mail in (don't e-file) your AZ return and attach a statement explaining the discrepancy. The alternative is file normally and explain it if and when you get a notice from the Dept of Revenue.
