I work and live in NJ. My employer generates W-2 and reports it to IRS based on my self-reported residence address. In the tax year 2017, I was briefly stationed in HK (for a month) in September, during which I changed my residence address to DE under my girlfriend’s home for the ease of mail communications with the company. Upon returning to the U.S., I forgot to update my employer to switch my address back to the NJ home. Consequently, my DE W-2 was over-withheld for additional taxes because my employer continuously (and incorrectly) reported my October, November, and December earnings to DE, despite that I had moved back to NJ and those months should really count towards NJ taxes. (Meanwhile on top of the DE withholdings, I was withheld for NJ taxes for Oct, Nov, and Dec because the income source itself was from NJ).
I have contacted my employer, but the payroll service department refused to generate a corrected W-2. Is there anyway with TurboTax, or with the use of the State forms, that I could report my taxes to reflect my true work-residential situation?
Thank you! I have Turbo Tax 2017 Premier.
To be honest, the employer didn't make the mistake. Furthermore, the employer can't just fix it by issuing a corrected W-2 - because they have already sent that withheld money to the state of Delaware who won't want to give it back.
To get that money back, you will have to file a Delaware return.
I am not sure that you even owe any Delaware tax, since you were never a "resident" in the tax sense. You were likely a resident of New Jersey the entire year (even when you were temporarily relocated to HK). And you don't have any Delaware source income that I can see.
And if you even owe any Delaware state tax, it is likely that New Jersey will credit you for taxes paid to Delaware - most states actually do try to avoid double-taxing your income.
This is just the result of a simple misunderstanding that you did not realize that when you changed your mail address, the payroll department took that to mean that you moved to Delaware in order to work (in which case you would have been a resident or had Delaware source income or both).
You will just have to bite the bullet this year and file two state returns.
Thanks so much for the input, BMcCalpin! I spoke to the payroll department, they've made it very clear they would not issue me a W2c, so I have to go with the current W2 forms.
recall in TurboTax, I was asked a few questions regarding "how much of the W2 earnings shall contribute to XXXX state" based on self-reported residency length in months. Can I leverage that answer to get most of my DE withholdings back? But then in that way, I don't know how to make up the missing taxes to pay NJ (Oct, Nov, Dec) since my NJ W2 was underreported.
Delaware and New Jersey are not reciprocal states, i.e., there is no special treatment to make it easier to do your taxes with both.
So, if you haven't filed yet, I would do Delaware fist as a non-resident, then I would do New Jersey as a full-year resident. Residency is a function of the facts on the ground, not what state happened to get your withheld taxes. Besides, it happens all the time that you live in one state but have to report income in another.
If you are asked, allocate all earnings to New Jersey. Besides, the New Jersey return will probably be aware of your Delaware wages - many states take the entire annual income and allocate it on residency time or whatever...