Does employer have to issue corrected W2 if I put wrong state on W4? If not, how do I enter the right amounts in my state returns?

[Howdy]

Hi. I need to amend my 2018 state returns, because I realized after I filed that my withholding should've been for a different state. (My fault - I had submitted a state W4 for the wrong state. I live & work in NY, while my employer is in MA, and my W4 was for MA. Oops!) Payroll tells me they don't issue corrected W2's in that situation.

1. Should I push back on Payroll? Are they required to issue a corrected W2 now?

2. If I don't get a corrected W2, when I amend my state returns, how do I indicate that my state wages are different from what shows on the W2? (It should be $0 in MA and the full amount in NY.)

Thanks!

[TomD8]

There is no point in your payroll department issuing a corrected 2018 W-2.  That's because your withheld 2018 MA taxes have long since been deposited with the state of Massachusetts.  But MA will refund those taxes to you.

What you'll have to do to correct the situation, and assuming you never physically worked within MA in 2018, is this:

1. file a non-resident 2018 MA return, showing zero MA income, in order to obtain a refund of the incorrectly withheld MA taxes;

2.  file an amended (or original, if you haven't filed one already) 2018 NY resident return, and pay your taxes due to NY;

3.  file an amended 2018 federal return, if you deducted state income tax on your original return and the difference between your original and corrected state tax deduction is significant.

[rjs]

The W-2 has to show the state tax that was actually withheld, whether the withholding was right or wrong. Your W-2 is correct as issued. There is nothing for your employer to correct.

I hope you have gotten your withholding corrected by now. If you still had MA tax withheld in 2019, you will have to file a MA nonresident tax return again for 2019.

[rjs]

The Massachusetts Department of Revenue might question your tax return showing zero MA income, since your W-2 shows MA wages. You will have to explain to them that it was a mistake and that you never worked in MA. It would certainly help if you can get a letter from your employer saying that. I suggest that you include an explanation with your amended MA return, but don't be shocked if they don't look at the enclosed explanation and they question the tax return anyway. If you do get a letter from your employer, send a photocopy of the letter, not the original, in case it gets lost.