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Allocating bonuses for prior year's work to state (and city)

Is it common practice to self-calculate (and attach documentation for) the amount of a bonus that allocated to each state and city that an employee worked in for filing state and city taxes?  In this specific example, the bonus I received in early 2021 was actually for work that I performed in 2020 entirely in state A.  However in 2021 I worked 90% State A and traveled to work 10% in State B.  Is it generally advisable/permissible to allocate the 2021 paid bonus income entirely to State A since it was for work performed the prior year in 2020?

 

 

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4 Replies
DanielV01
Expert Alumni

Allocating bonuses for prior year's work to state (and city)

It depends on the states involved.  Could you provide additional information as to the states involved, and which is your residency state?

 

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Allocating bonuses for prior year's work to state (and city)

also do you get a w-2 or 1099? 

Allocating bonuses for prior year's work to state (and city)

I receive a W-2. State A is Colorado and State B is Michigan. The Michigan wages are performed in Lansing which has a 0.5% nonresident tax on wages as well. 

Hal_Al
Level 15

Allocating bonuses for prior year's work to state (and city)

Q.  Is it generally advisable/permissible to allocate the 2021 paid bonus income entirely to State A?

A.  Simple answer:  yes.  That assumes you were never a resident of Michigan.  None of it is taxable by Lansing, since you neither worked or resided in Lansing in 2020. 

 

Lansing taxes "salary, bonus, wage, commission, and other compensation for services rendered as an employee for work done or services performed in the city."

 

 

 

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