Multiple States

[prr]

Wife and I, Lived in CO for 6 months and we both had State taxes withheld (no problem). In July we moved to NC.  Our employers sent us W2's with State taxes withheld for the states they are located in.  One in PA(me) one in VA (my spouse).  We were not physically in PA or VA only telecommuting.  We both have our own office space in our home in NC.  I am unclear how to proceed.  None of the states involved are part of the "convenience rules" for telecommuting.  Why didn't the employers in PA and VA use NC for our state tax?

[hbl3973]

prr,

Sorry to hear that your employers in PA and VA didn't withhold NC income tax.  But,  while it places an additional burden on your, all is not lost.  You can complain to the companies later. 

In terms of filing status for all the states for which you need to file a return:

You were part year residents of CO and of NC.  You were nonresidents of PA and VA. 

As you indicated, your CO return should be relatively straightforward, so once you have completed the federal return, tackle that one next.  While CO will ask for your total full year income, don't sweat it as they prorate the tax by the percentage of CO income (and deductions) so it works out to be pretty the same as if you just were directly taxed on your CO income alone.  (CO has a flat rate income tax.)

NC provides a tax credit for taxes that you are paying to PA and VA, so do those returns next.  

Finally, do the NC return, being sure to apply the credit for the PA and VA tax bill. (Not your withholdings or refund/amount due.)

[prr]

Thank you!