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Denicelg
Returning Member

Employer paid state taxes on a state we didn't live in

My husband's employer took a state tax for WI out of his pay for the first month or two of him working for them.  We live in WA (which doesn't have a state tax).  Is there a way to file through TurboTax and get that all back?  I've filled it all out, but Turbotax says that we'll only get about half back.  I'm wondering if the employer filled out his W2 wrong...should there be an amount in box 16, if he didn't live in that state while working for them?  Thanks in advance!

8 Replies
HelenC12
Employee Tax Expert

Employer paid state taxes on a state we didn't live in

Yes. You will have to file a WI nonresident return to recover the erroneous withholdings.  What matters is where you earned the income—not where your employer is located.

 

On the nonresident return, you'd declare earnings of 0 so you can get a full refund for the taxes your employer withheld.

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Denicelg
Returning Member

Employer paid state taxes on a state we didn't live in

Okay, thank you for your response!

 

Do you know if I need to get a new W2, since they put the amount made in box #16 (state wages, tips, etc).  Shouldn't that box be $0, and just the amount of state tax paid in box #17?

 

Thanks in advance!

Irene2805
Expert Alumni

Employer paid state taxes on a state we didn't live in

No - You don't need to get a corrected W-2.  The amount in box 16 is the amount used to calculate box 17.  Chances are the employer won't issue a corrected W-2 anyway since the state taxes have already been collected and sent in to WI.

 

Just follow HelenC12's advice above and file a WI nonresident return.

Denicelg
Returning Member

Employer paid state taxes on a state we didn't live in

Thank you!

Denicelg
Returning Member

Employer paid state taxes on a state we didn't live in

Okay, even if the amount they have in box #16 is the full amount made of the year?  I would think if only 1 or 2 months of state tax that was accidentally paid, would only be the amount that was made during that time?  (I'm sorry, but I just really want to be sure they did it right.  The person dealing with it is not very experienced).  

DaveF1006
Employee Tax Expert

Employer paid state taxes on a state we didn't live in

It depends. Depending on the state you live in, you may need to allocate the income amount earned in that state.  When you prepare the return for that state, there may be allocation questions in the interview that will allow you to allocate income only earned in that state.

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Denicelg
Returning Member

Employer paid state taxes on a state we didn't live in

We live in WA state, but the employer accidentally paid WI state taxes for a month or two when my husband first starting working for them.  We did NOT work or live in WI during this time.  So there was no income earned in that state at all.

Irene2805
Expert Alumni

Employer paid state taxes on a state we didn't live in

Don't worry about the W-2.  When you go through the WI nonresident return, indicate that zero of the wages are applicable to WI.

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