Hello Forum members,
I am faced with the following situation with respect to state taxes in MA:
I received two W-2's in 2017 for amounts $X and $Y. The $Y is my wife's W-2 that was paid to her in 2017 while we were living in Massachussets. However, she was not working at that time. The W-2 was from a company that went bankrupt in 2009. My wife worked for that company until 2009 and we were full-year residents of Texas at that time. Her company's bankruptcy proceedings were settled in 2017 and thus her backpay was mailed in 2017 to us. We moved to Massachussets in 2011.
I reported both W-2's on the Federal and State tax returns. However, I did not include $Y in my taxable earnings for MA but only reported $400 because Box 2 or 4 on the W-2 stated that I should only report about $400 of it as taxable MA earnings.
The State of MA has now sent me a Intent of Assessment Letter stating that I under-reported my wife's W-2 (although I included the W-2), and assessed me taxes and fines on the $Y. When I spoke to them briefly, they stated that I owe them the taxes without giving any good reason.
I contend that I do not owe any taxes on my wife's W-2 because
a) The W-2 asked me to report only $400 to MA,
b) The payment is just a highly delayed payment when I and my wife were residents of Texas, living in Texas, and had no connection to MA. We only moved to MA much later.
Please let me know what your opinion is? Should I fight this with the state or suck it up and pay up?
Thank You,
-vganti1965
