Employer Erroneously Withheld Partial Taxes For Wrong State

[Benwol94]

Hi,

I live in New Jersey and work as a full time remote employee for an employer based in another state.  Since my primary work location is New Jersey, my taxes are (appropriately) only withheld for New Jersey.

I traveled to Wisconsin for a work trip for two days that, according to company policy, did not count as out of state work and no Wisconsin taxes should have been withheld.  While my payroll was originally processed incorrectly and Wisconsin taxes were withheld for those two days, my payroll was supposedly corrected after the fact.  However, when I received my W2, I noticed a section for Wisconsin taxes, indicating taxes withheld.  Sure enough, when I double-checked my paycheck, my tax withholding was never corrected (meaning taxes withheld for Wisconsin were never refunded and the appropriate taxes for NJ were never withheld).

I've already reached out to my employer about receiving a corrected W2 and to have my payroll corrected, but how will that impact how I file my returns?  I assume this will also depend on whether a corrected W2 is issued, both Wisconsin and New Jersey receive the corrections, and my tax withholding is corrected in an upcoming paycheck (also not sure what the impact would be if those debits/credits occur in 2024).

[TomD8]

Regardless of your employer's policy, income you earned from work actually (physically) performed in Wisconsin is Wisconsin-source income, and therefore taxable by Wisconsin.

WI doesn't require non-residents to file a tax return unless their WI-source income was $2,000 or more. But even if your WI income was below that amount, you'd have to file a WI return in order to obtain any refund you may be due. https://www.revenue.wi.gov/Pages/FAQS/pcs-npr.aspx#npr1

ALL your income, including that from WI, is taxable by your home state of NJ. You'll be able to claim a credit on your NJ return for any tax actually paid to WI, so in effect you won't be double-taxed.