I lived in NV and CT. I worked remotely and occasionally on-site for a CT company.

[candycanepanda]

I lived in NV and CT.  I own property in NV and have self-employment in come in NV.   I am a W-2 employee for the CT company I work for.  I worked remotely and occasionally on-site for the CT company.  The CT company is taking income tax.  Are they able to fairly charge me this income tax even though I am only occasionally going into the office?  

[rjs · Accepted solution]

You have to pay CT tax on all the income that you earned while you lived in CT, no matter where the income was from. You also have to pay CT tax on the income that you earned for the time that you worked in CT, whether it was on-site at the company office or somewhere else in CT, even if it was only occasional, and even though you live in a state that has no income tax. The employer has to withhold CT on all the pay that you earned while you lived in CT, and on the pay that you earned for working in CT. If they withhold more tax than necessary, it will get reconciled when you file your CT state tax return at the end of the year.

It's not clear when you lived in each state. If you moved out of CT, did you notify the employer to change your state of residence? If they have you listed as a CT resident in their payroll system, they will continue to withhold CT tax on all your pay.

CT has what's known as a "convenience of the employer" rule that imposes CT tax on some out-of-state remote workers. But it only applies if you live in a state that has the same rule. Since NV does not have a convenience of the employer rule, the CT rule does not apply to you.

[NCperson]

@candycanepanda - you can have only one primary residence at a time.  If you can please define what is your primary residence, these answers become a lot clearer.

Where are you registered to vote? From what state is your driver's license?  where you do receive your mail? in what state is your car(s) registered? In what state do you sleep (number of days in each state may help).  that can provide guidance to what state reflects your primary residence. 

where you own property is really immaterial to the question.  

[TomD8]

If you are a resident of CT as defined in this reference: https://www.cga.ct.gov/2020/rpt/pdf/2020-R-0039.pdf, then ALL your income is taxable by CT regardless of how or where you earn it.

[candycanepanda]

@NCperson my primary residence is NV.

I am registered to vote there, have car registered there, and live there.

CT company taxes me.

When I file my state return, I have to file a CT state return?

Or do I file a NV return with out of state income? The only reason I ask this is because my human resources manager mentioned something about this.  However, in Turbo Tax when I went to Nevada returns there is no NV return because they do not have any state income tax.  

[candycanepanda]

Thanks @TomD8 I am definitely a non-resident looking at this list.

I've paid CT taxes in all of 2021 and I changed my address with my employer and am seeing if I can get exempt for upcoming 2023 since NV does not recognize the "convenience of the employer rule".  

My remaining question for 2021 is the following: Do I use a CT state return to file the tax return? and am I subject to all CT tax laws as a non-resident of CT? Because I made money outside of CT in real estate earnings, and those should not be taxed because I am a non-resident of CT.  

[rjs]

For 2022, if you lived in Nevada all year, and you were not a CT resident for any part of the year, you will have to file a Connecticut nonresident tax return. You will pay CT tax only on income that you earned for the occasional times that you worked in CT. You are subject to CT tax laws for any income that you earned for working in CT, even though you are not a CT resident. You will not pay CT tax on your NV real estate income or any other income that is not from a CT source. If you did not work in CT at all in 2022, you should get a full refund of all the CT tax that was withheld from your pay.

You do not file a NV tax return because, as you have discovered, there is no NV tax return because NV does not have state income tax. Apparently the HR person that you spoke to is not aware of this, so you should be cautious about any tax advice that you get from HR, at least when it concerns any state other than Connecticut.

Ideally your CT employer will correct the amount of your CT wages before they issue your W-2, so that box 16 of the W-2 will show only the amount that you earned for working in CT. (But box 17 has to still show the full actual amount of CT tax that they withheld.) If they don't make the correction, the CT wages in box 16 of your 2022 W-2 will include income that you earned when you were working in NV. Then your CT tax return will show a lower amount of CT income. In that case, you should expect to get a letter from the Connecticut Department of Revenue Services saying that your CT tax return is wrong, and you owe more CT tax. You will have to reply with an explanation of why the W-2 is wrong. It would certainly help to convince them if you can get a letter from your employer saying that the CT wages on the W-2 are wrong.

[candycanepanda]

Thanks! 

-How do I file the CT "nonresident tax return"? I don't see anything on the Turbo Tax questionairre regarding residency on the CT return (I do see the residency questions on my CA state return).  

-I sold a property and also have rental real estate income in California and Nevada and the state of Connecticut is taxing me for this sale in Turbo Tax even though it was not Connecticut income, is there some bug or a setting that I need to fix? 

-What do you mean "if I did not work in CT in 2022, I should get a full refund on CT tax"... do you mean work "FOR" Connecticut? Because I did work for CT remotely, but I did not work IN Connecticut.  

-What do you mean "Ideally your CT employer will correct the amount of your CT wages before they issue your W-2, so that box 16 of the W-2 will show only the amount that you earned for working in CT." I'm confused again, do you mean working "FOR" CT? Are you suggesting my employer can put "$0" in box 16, since I was a CT non-resident who worked out of state but worked remotely for CT? Does this mean I have zero CT tax liability if they do this and I get 100% of all CT state taxes paid back? 

[rjs · Accepted solution]

As far as I know, none of the TurboTax state software for 2022 is available yet. If you are using TurboTax for 2022 and there is something that looks like a state program, it's probably so skeletal and preliminary that it's essentially useless. You can't draw any conclusions from it.

There has to be a residency question in the CT interview. CT has a different form for nonresidents. Maybe you clicked past it too quickly. It would be one of the earliest screens in the CT interview. If you're looking at 2021, go through the CT interview again and read the early screens carefully. Also, in the federal Personal Info section, make sure you said that you have income from other states, and that you selected CT as one of the other states.

As far as CT taxing your non-CT income (if you are looking at 2021, not 2022), probably one of two things is going on. One possibility is that, since you didn't see the CT residency question, you are creating a CT resident return instead of a nonresident return. The resident return would, of course, tax all your income, no matter where it's from. The other possibility is that you are misunderstanding how the CT nonresident tax return works. It first calculates what the CT tax would be on all your income, then prorates the tax based on what percentage of your income is CT income.

When I said "in CT" I meant IN CT.

The W-2 may be a big problem. They can't put zero in box 16, because the state tax withheld in box 17 can't be more than the state wages in box 16. The correct and best solution would be for the employer to refund to you all of the CT tax that they withheld, and not put any state information on the W-2. Just leave boxes 15, 16, and 17 blank. Then you wouldn't even have to file a CT tax return. They can do that. They can get the money back from the state. But they might give you a hard time about it, or say that they can't do it. If they won't do that, then they shouldn't manipulate the W-2 at all. They will have to put the full amount that they paid you in box 16, even though none of it is actually CT income, and the full amount of CT tax withheld in box 17. Then you will have to reallocate the income on your CT nonresident tax return to show that you had zero CT income. If you have to do this, you may need to get help from a tax professional. I'm sorry I can't give you a better answer.

[candycanepanda]

Hi thank you @rjs ! 

I found the issue, as you suspected int he personal federal I did not have the state residency set correctly.

This is a great answer and very helpful.

I will not request or fight my employer with the state taxes I already paid.

However going forward they did say that they will cooperate.  

As a resident of NV and a non-resident teleworking for CT, from what you're saying I am completely exempt from state taxes?  The employer would then just remove all state information on the W-2 for me? 

[rjs]

---

@candycanepanda wrote:

As a resident of NV and a non-resident teleworking for CT, from what you're saying I am completely exempt from state taxes?  The employer would then just remove all state information on the W-2 for me? 

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You do not have to pay any NV or CT state tax (as long as you do not do any work IN CT). And, yes, your CT employer should not put any state information on your W-2. But you mentioned that you have rental income from California. You have to file a CA nonresident tax return and pay CA tax on the rental income. So you are not completely free of all state tax.

(Technically "exempt" is the wrong word. You are not exempt from CT tax. You just don't have to pay any CT tax because you have no CT source income. "Exempt" implies that you would never have to pay any CT tax under any circumstances, even if you had CT income. And, of course, you're not exempt from NV state tax because there is no NV state tax to be exempt from.)

[candycanepanda]

Thanks @rjs 

I do SOME WORK "in" CT.

However I am in CT far less than the 183 days on their residency qualifications.  

Can I still request to my employer to have them remove the state information? 

The CA tax is no big deal.  So many people think CA is bad on taxes.  Man, let me tell you, the east coast is a tax trap! So much about the boston tea party.  I have no issues with CA state taxes because I reinvest all the money and the depreciation offsets the state income tax.  That seemingly does nothing in CT because they do not recognize the special depreciation.  

[TomD8]

"I do SOME WORK "in" CT."

Income from work you actually perform in CT is taxable by CT, regardless of whether or not you are a CT resident.

The fact that you are in CT fewer than 183 days simply means that you will file your CT tax return as a non-resident, rather than as a resident.