In June 2023, our family moved from Virginia (state income tax) to Florida (no state income tax) due to a change in job. At my previous employer in Virginia, I was contributing to a 457b deferred compensation plan. On separation from that position, the 457b plan required a lump sum distribution (was not able to do a rollover or elect a yearly distribution). The funds were distributed 3 months after my separation date. The deferred income in the plan was earned in Virginia over several years, but I received the money when living in Florida. I received a W2 from Principal to my home in Florida early this year reporting this distribution. Federal taxes were withheld. Box 15 of the W2 lists "FL" as Payors State ID and since Florida has no state income tax, no taxes were withheld.
The TurboTax software has a help section stating the following: "For recipients of these W-2s who are part-year residents or full year nonresidents of a state, the portion of wages that are sourced to each state is reported in Box 16 of the W-2."
My question is…it seems like this income is being allocated by Florida, but do I report this on my Virginia state taxes since I earned this income over several years while work in Virginia? It is a little unclear to me. Certainly, it would increase my VA tax bill, so do not want to do this if not needed.
Thanks for any help/guidance.
Regards,
David
