Well, the 763S was wrong if you lived in NC and worked in VA. The 763 S is only for situations where VA taxes were improperly held. Usually, that only happens for residents of Reciprocal tax states to VA...meaning if you lived in DC, MD, PA, KY, or WV and worked in VA, then VA taxes should not be withheld.
For any other state where the worker crosses the border to work in VA, hen VA taxes are properly being withheld, and you have to file a VA nonresident form 763, where they tax your VA income (with a credit for the taxes withheld).....and in your case, you would also file your normal NC resident tax return for the year...where NC taxes all your income for the year, but then NC allows a credit for the taxes that VA kept.
So you will have two possible issues now. Preparing and filing the full VA form 763. and then checking your NC forms to see if you got the proper NC credit for the taxes VA kept on those "original" NC forms.
Preparing and filing the full VA form 763 depends on how the 763S was originally prepared and filed....like did you use the TTX software for the 763S...or did you prepare it separately. IF you prepared it separately form the TTX software, you should be able to complete the 763 in the TTX software now...but filing it will depends on what VA has specified you should do in their letter where they refused to grant you the refund. Did the request you to mail the full form 763 separately to them, or did they say you could still efile it (whether the e-filing would go thru would depend on whether the 763S was e-filed....I don't know if the TTX software allows a 763S to be prepared and e-filed or not)
____________*Answers are correct to the best of my knowledge when posted, but should not be considered to be legal or official tax advice.*
