My company has been accidentally taking out State Tax for the past 2.5 years for a state I never lived in

[yetisalmon]

Hi There,

This is a total idiot mistake on my part. I live in TN but work for a company headquartered in KY. I just realized that for the past 2.5 years they have been taking KY State taxes out of my paycheck. Which would add up to around 5 grand for that timeframe. Is there anyway of getting this sorted with the state of KY and getting my $ back? I never lived in KY, and I never even traveled there for work. 

Thanks in advance!

-Ross

[Anonymous]

you might talk to the payroll department to see if the company will refund the money and then file amended payroll tax returns to get the taxes back from KY.  

if not, first they will need to correct your W-2's if they show the wages to be KY.  without this  correction KY will refuse to refund the money.       

the w-2 will have to show something like $0 in KY wages but the actual withholding.  then you can file non-resident returns for each year.   

you might also talk to the payroll department to see if the company will refund the money and then file amended payroll tax returns to get the taxes back from KY.  

[DanielV01]

Afterwards, you probably will have to file Nonresident Tax Returns with KY showing $0 KY income.  Kentucky allows up to 4 years to receive a refund on tax returns, so if the tax years in question were 2015 or later, you should still receive a full refund for the taxes withheld.  If your company cannot correct the w-2 to show $0 KY income, you may need to show proof that your work location was never inside of KY, and that your residence was not inside of KY.  If you cannot get the corrected W-2, contact the KY Department of Revenue to ask them what proof they would need on your end to get the withheld tax refunded.  You are entitled to a refund of these taxes withheld.  As @Anonymous mentions, this is made easier if the company can issue you corrected W-2's showing $0 as KY wages.  And you certainly want to make sure the company has this corrected moving forward if you are still working with them. 

Thus, if your company's payroll cannot resolve this issue and refund you the money directly, you should be able to file a nonresident return reporting $0 income to KY to receive a full refund of the withholdings.

[Hal_Al]

Ideally, your employer will handle it with KY Dept. of Revenue (DOR) and give you your money back.

2nd choice is, as HACKITOFF said, is get a corrected W-2 from your employer and then file back state returns for  refunds.  KY has a simple form for this  type of refund https://revenue.ky.gov/Forms/40A100.pdf

Even without a corrected W-2, you should apply to  DOR for refund(s).  You can expect DOR to require some kind of proof that you didn't work in KY. 

[TomD8]

If you haven't already done so, you should file KY Form K-4 with your employer.  Here's a link to that form: https://revenue.ky.gov/Forms/42A804%20(K-4)%20(02-2019).pdf

This will allow them to cease withholding KY taxes from your pay.

[yetisalmon]

Thank you all for your swift and very helpful responses! I am looking into the matter with KY Revenue and my company. Thank you so much!

Ross