Lived in DC worked in VA, reciprocity but wrongly paid VA taxes, then moved to VA towards end of year - help!

[ninjaBaristas]

I have lived in DC and worked in VA for a number of years.  With DC/VA reciprocity, I've always paid quarterly estimated DC taxes and VA employer did not withhold VA taxes - so far so good.

Employer accidentally started withholding VA taxes despite paying DC estimated and living in DC.  This roughly started in March and was corrected in October.

To make things trickier, I moved to VA in November and thus stopped paying DC estimated taxes, but employer didn't withhold VA taxes through end of year so I paid an estimated tax payment to VA for final 2023 quarter.

My W-2 is all kinds of messed up now - shows 100% of my wages being taxable in VA as well as about 75% being taxable in DC.  Every previous year's W-2 has listed 100% in DC, nothing in VA.  I would expect a small portion in VA this year despite them owing me 8 months of taxes back, while the majority of my wages still being taxable in DC.

Asked employer for a corrected W-2, but corrected form came back with 100% being taxable in VA and nothing in DC - still wrong!

Any advice on:

1) getting wrongfully withheld VA taxes returned

2) going about proving W-2 is incorrect to get a revised copy

3) proper order/status of filing for VA and DC since I will have to file both (i.e. nonresident DC and partial year resident VA, or something else?)

Thanks for any help you can offer!

[MarilynG1 · Accepted solution]

W-2's are often incorrect, particularly for state withholdings, and your entries in TurboTax don't have to match the document. 

Technically, all your income is VA-Sourced, so your corrected W-2 showing 100% to Virginia is not incorrect.

First prepare a Part-Year Resident Return to Virginia and report the income earned in Nov/Dec after moving there, and the total amount of tax paid there. 

Then prepare a Part-Year Resident return to DC (Jan-Nov), reporting the wages earned while living there, and the amount of tax paid to Virginia on those wages.  This will be most of your income, and you may need to do some math.  

Here's more info on How to File a Part-Year Resident Return and  Allocating Income for a Part-Year Resident. 

[ninjaBaristas]

Thanks so much MarilynG1!