Incorrect address on W-2 and therefore I had tax withheld for the wrong state. Would it be better to file my taxes in both states or wait for the corrected W-2? The state won't refund my money since the incorrect address is in their state.

[HelenC12]

If your employer sent the withholding to the wrong state, changing the address on your W-2 won't make a difference. You'll need to file a return in the nonresident (wrong) state to get your state money back. 

See How do I file a nonresident state return?

[babenegar]

I had this problem last year and the state won't recognize that the refund is valid, since the address on the W-2 is in that state. I am waiting for the corrected W-2. So would it be better to go ahead and file now and do an amendment when I get the corrected W-2, or should I get an extension and then file at that time asking for the refund. (the question also applies to the state return where I live since the corrected W-2 will change the AGI for my state and change the tax owed to my resident state.

[MarilynG1]

If you Efile a Non-Resident State return, the address on your state return will be your current Mailing Address that you entered in the MY INFO section.  Indicate which state you are a Resident in, and that you 'made money in another state'.

Since many people move, the address on the W-2 is often incorrect incorrect anyway, so this is not a factor in determining residency.  It doesn't matter if the employer is located in that state, only what state(s) you actually lived in. 

What's important for you is to indicate in the Non-Resident interview that you did not live in that state. 

Prepare your Non-Resident State first, then your Resident State.

Here's more info on How to File a Non-Resident State Return.

@babenegar 

[babenegar]

Ok,

Thanks, last year I didn't file and the return was rejected because the W-2 showed the tax was applicable to the state.

But you are saying that this comparison doesn't apply for returns that are efiled? That is good to know.

[DMarkM1 · Accepted solution]

The same rules and filing are applicable whether you mail in or e-file your tax returns.  As @MarilynG1 states the information on your tax return is used to file the correct forms for the states; not the address on the W2.  What has passed has passed. The taxes have been paid (wrong state) or not paid (resident state) already.  Now you use your tax return to get a refund from the wrong state and pay the correct state.  

You are not going to get a corrected W2 due to an incorrect address that changes your tax return calculations. Unless the amounts you were paid (box 1) are changing, you do not need to wait for a corrected W2.     

However, you will need to submit a state W4 to have your employer change the state that it is withholding for going forward.

In the "My Info" section indicate the state you lived in on 31 Dec 2022 and use your current address.  This will generate the resident return forms for your resident state that does tax that income.  Since there was no withholding you will likely owe a tax to this state.    

Since you did not live or work in the state that taxes were withheld for,

1. In the "My Info" section scroll down to "Other State Income"  
2. Select "Yes" you earned money in another state  
3. Select that state from the dropdown menu 
4. Enter the W2 information just as your form indicates  
5. Go to the state interview and verify your nonresident status  
6. Continue to the "Income" section in that state return.  
7. There you will be able to enter zero for the income that should be allocated to the state. Your return will then show a refund of all the withholding entered from your W2.

[babenegar]

Mark, Marilyn, and Helen,

Thanks for your replies and help. I appreciate the responses and the speed with which you replies. The reason for the question is this is the second year that I have had to deal with this due to a misunderstanding related to this question. My employer had collected state tax and showed my residence incorrectly and  when I filed for the refund for tax year 2021, my return was rejected because of the address on the W2 (the rejection letter wording). I have gotten the payroll company to correct the address and for the last three quarters has been withholding the state tax correctly (I now have two W-2s for last year for work for the same company). The corrected W-2 and W-2c should be complete by June and hence the question about getting an extension to reduce the chance of having the return rejected once again. I realize this only affects the two states taxes and will not have any affect on the federal return.

[AmyC · Accepted solution]

You can go ahead and file your federal return since it is not affected. An extension is used for time to file but not to pay. If you will owe either state money, you need to go ahead and pay by your state deadline. Otherwise, you could be charged penalties and interest. It only takes a couple of minutes to do a corrected w2 so forcing you to wait until June seems ridiculous. Good luck!

[babenegar]

thanks for this additional information AmyC. That is what I needed to know. I did understand about needing to pay the tax by April 18th, but I've had enough confusion around this that I felt it was best to ask.

Again thanks to all that replied for the good answers.