I worked in Washington all year last year and the company I worked for paid the wrong state, Oregon, income taxes. How do I fix this? I did no work in Oregon last year.

[CatinaT1]

First, talk to your employer to have your withholding corrected going forward.  You will need to file a non-resident Oregon return with no income allocated to Oregon.  This will allow for a full refund of your withholding. 

[xmasbaby0]

WA has no state income tax.

[SteamTrain]

...and....and if you happen to  LIVE in Oregon, but work across the border in WA....then the employer must have been registered with OR to withhold OR taxes. 

In that type of working/living situation, you would have lucked out, since you would need to have OR taxes withheld (if the employer can do so) to avoid an OR underpayment penalty, since OR taxes their residents income no matter where earned  (of course, with the proviso that OR would allow a tax credit for taxes paid to that non-resident state...but since WA doesn't tax that...there would be no credit for taxes paid to WA)

[Hal_Al · Accepted solution]

You say where you work but not where you live.

If you live in OR and work in WA, you owe OR tax on all your WA earnings. 

This is the general rule: The income is work state (WS) source income since it was earned there. Resident States (RS) tax all their resident's income, regardless of where earned. You will file a non-resident tax return for the WS and report the WS income. You will file a full year resident return for the RS, reporting all your income. The RS will give you a credit, or partial credit for any tax paid to the WS.

When you worked in a state without an income tax (e.g. Washington), there will be no credit, since there was no WA tax. In other words, having worked in a state without an income tax does not get you out of paying state tax on that income, to your home state (OR)

[brakenb]

Ive done my taxes for other states and had to pay the income taxes in those states due to them having income taxes. This seems like double taxation. I also wonder how I apply for unemployment. Do I send to Oregon or Washington? I do live in Oregon.

[xmasbaby0 · Accepted solution]

If you live in OR apply for unemployment compensation there.  

https://www.oregon.gov/EMPLOY/Unemployment/Pages/default.aspx

[brakenb]

Who do I request unemployment from? If I am taxed to Oregon, then Washington wont pay for it unless I have accrued ins from there unless I miss my guess as when I filed for unemployment it have an amount I could get back from them that did not include the former company I worked for. 

[xmasbaby0]

  "unless I miss my guess....."   Don't guess.  Apply for the unemployment and see what they do.  You are supposed to apply in the state in which you live.  The unemployment office gets information from the employer even if the employer is in WA.  The employer has to pay into unemployment compensation for its employees.  

[Hal_Al]

Q.  "I had to pay the income taxes in those states due to them having income taxes. This seems like double taxation."

A. No. Oregon gives you a credit, or partial credit, for what you paid the other states.  You come out even, or near even, depending on tax rates and calculation procedures.

Q. I also wonder how I apply for unemployment. Do I send to Oregon or Washington? I do live in Oregon.

A.  I don't know WA & OR rules specifically. But, based on posts I've seen in this forum, it appears you apply in the employer location state.  You may have to just ask them.  I'd start with the WA unemployment office. 

[xmasbaby0]

Here is some information from each state's unemployment site:

https://esd.wa.gov/unemployment/basic-eligibility-requirements

https://govstatus.egov.com/ui-benefits/benefits