Moving and Taxes Paid to Wrong State for 1/2 of 2023

[pxlism]

Hello! I moved from Virginia to Kentucky in September of 2023. I kept the same employer (federal agency), but HR and I didn't update my W4. Due to this, I've been paying all state taxes to Virginia since I started work in September. My 2023 W-2 reflects payments only to Virginia, and I'm unsure how much money should have been paid to Virginia and then to Kentucky. I know there's reciprocity in Virginia and Kentucky, but it sounds as if that's only if you live and work in the two different states, which is not my situation (From January to September, I worked and lived in Virginia, from September to present, I lived and worked in Kentucky).  I'm not sure if this is something that needs to be corrected by HR at this point, or if I can file in a way that has Virginia pay taxes owed to Kentucky to me, so that I can then pay them to Kentucky for 2023. Any guidance would be much appreciated (else I'll have to go to a tax preparer in my city for help). 

[DMarkM1]

Yes. As you surmise since you were not living in one state and working in the other, that reciprocity agreement does not apply in your situation.  You will file part-year resident returns for each state. 

Since you and your employer did not work the state withholding to reflect your move, ultimately you'll get a refund from VA and pay KY.   Below are the steps to file your wages correctly.  

NOTE:  Be sure to get your state withholding updated for KY going forward. If there was VA withholding in 2024, you'll need to file a non-resident VA return next year to get a refund of that VA withholding.

1. In the "My Info" section indicate your resident state on Dec 31st was KY
2. Answer "Yes" you lived in another state
3. Select "VA" and enter the date you moved to KY
4. This will generate part-year returns for both states 
5. Next, in the "Wages & Income" section enter the form W2 information exactly as shown on your form
6. After completing the federal interview work the VA part-year return
7. In the income section allocate to VA only the part of the wages that belong to VA

• Divide the number of pay periods during your VA residency by the total pay periods for the employer
• Multiply that percentage by the income in Box 1 of your form W2; this will be the VA portion

        8. After completing the VA state interview work the KY interview

        9. Allocate the remainder of the box 1 income (after subtracting VA portion) to KY in the income section