What should I do if I have withholdings from two states but a portion of the withholdings from one of the states is invalid?

Forum|Forum|6 years ago
June 29, 2020
2 replies
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My employer is based on California. I worked for them remotely from Ohio until June before I moved to California permanently.

I was double taxed on the the income I made while living in Ohio from Jan-June. Based on my research, I do in fact owe that tax to both states, and there's a tax credit for Ohio called "Taxes paid to other states" that I can use to reduce how much I owe.

However, from July through November, I had my Ohio address in Workday (this was my fault for not updating it), so my employer was withholding both Ohio and California, even though I "should" have only been withholding CA.

What can I do here? I'm not sure how to get a corrected W-2 from my employer because it was generated on Workday based off my payslips which were generated each month based on my incorrect address. Is there anything I can do in TurboTax to get this filed correctly?

Best answer by Hal_Al

You do not owe tax to Ohio for the income earned after you moved.

You cannot claim a credit on the Ohio return for tax you paid to CA.

You can claim a refund of the over withheld Ohio tax.

Ohio does a convoluted tax calculation for part year residents. It calculates tax on total income, then it calculates a part year resident credit, which it subtracts from the tax it calculated on the total income. The credit is calculated as your non-Ohio income divided by Total adjusted Income multiplied by the total tax. TurboTax (TT) does this by allocating your income as either Ohio or non-Ohio. W-2 income will be allocated by the state name abbreviation shown in box 15 of your W-2. TT will ask you, item by item, in the state section, how much of your other income is Ohio or non-Ohio income. Make sure that your non-Ohio wages show CA (Other state postal abbreviation) in box 15 of your W-2 screen, with the CA amount in box 16.

Be advised that you will probably have to use a work around to get TT to prepare the return to get you your refund. At the w-2 screen split the boxes 15-20 W-2 info into 2 lines. On the 1st line leave OH in box 15 but change the amount in box 16 to the amount you earned while living in OH; leave the OH withholding in box 17. On the 2nd line with CA abbreviation in box 15, increase the state wages amount in box 16; by the amount you reduced the OH box 16. Don't change the CA withholding in box 17 (even if blank or 0)

A

Anonymous

copies of the W-2's go to the states so no matter what you do in TT if that's different from what's on the W-2's your returns will get kicked out by their computers and you will get notices adjusting from what you show to what's on the w-2's. states also get info from other states if you claim credit for double taxation so even Ca may issue you a notice. could you write back to the states after you get them and explain what happened? maybe CA will because you'll be claiming less of a credit but certainly not Ohio. they will want corrected w-2 from your employer. so contact your employer and see what they'll do. if Workday is the "employer" shown on the W-2 and your employer says to contact them ask for their phone number

also TT accuracy guarantee may be void.

Hal_Al

Answer

Level 15

You do not owe tax to Ohio for the income earned after you moved.

You cannot claim a credit on the Ohio return for tax you paid to CA.

You can claim a refund of the over withheld Ohio tax.

Ohio does a convoluted tax calculation for part year residents. It calculates tax on total income, then it calculates a part year resident credit, which it subtracts from the tax it calculated on the total income. The credit is calculated as your non-Ohio income divided by Total adjusted Income multiplied by the total tax. TurboTax (TT) does this by allocating your income as either Ohio or non-Ohio. W-2 income will be allocated by the state name abbreviation shown in box 15 of your W-2. TT will ask you, item by item, in the state section, how much of your other income is Ohio or non-Ohio income. Make sure that your non-Ohio wages show CA (Other state postal abbreviation) in box 15 of your W-2 screen, with the CA amount in box 16.

Be advised that you will probably have to use a work around to get TT to prepare the return to get you your refund. At the w-2 screen split the boxes 15-20 W-2 info into 2 lines. On the 1st line leave OH in box 15 but change the amount in box 16 to the amount you earned while living in OH; leave the OH withholding in box 17. On the 2nd line with CA abbreviation in box 15, increase the state wages amount in box 16; by the amount you reduced the OH box 16. Don't change the CA withholding in box 17 (even if blank or 0)