State Income Taxes

[Ijgreen]

My employer uses the expenses to track were employees travel and determine when to take out state income taxes.  They claim that cannot use timesheets per the IRS, I doubt.  I worked in GA and stayed in a hotel for 39 night during the first quarter.  But they do not start taking out taxes for GA till several weeks after the travel has occurred.  The total time I was working in GA was 5 weeks and 2 days.  Per the company's policy instead of taking out taxes for 5+ weeks like I worked they are taking out taxes nearly 8 weeks because they have decided that a month only has 20 days in it.  And so 39 days into 20 day blocks means one month of pay has taxes out for GA taken at 100% and the next month 19 out of 20 days so 95% taxes taken out for GA in it.  So because I worked and stayed over the weekend (while working the weekend as well) I am getting taxed over a longer period.  

Also because the taxes are coming out later, they are taxing my OT for GA when the OT was actually earned later and in a different state (non income tax state).

Any help to rebut this insane policy.

[rjs]

It's not worth fighting with your employer about it. It will all get straightened out when you file your Georgia tax return at the end of the year. The withholding is not the final tax that you pay. It's just an advance payment towards your actual Georgia tax for the year. When you prepare your Georgia tax return you will specify how much of your income was for the time that you worked in Georgia. The tax return will calculate the Georgia tax on that income, and you will get credit for the Georgia tax that was withheld. If the amount that was withheld is more than the actual tax, you will get a refund of the excess.

[Ijgreen]

So I just tell Georgia to ignore what the employer put on the W-2 for the state taxable income and holdings?  Believe I say instead?

[rjs]

@Ijgreen 

I was focusing on the withholding because that's what you talked about in your question. You don't want the state to ignore the amount withheld on the W-2, because that's the amount of Georgia tax that was actually taken out of your pay. You want to get credit for all of it, even if it's more than it should have been. On your tax return, just enter the state tax withheld as shown in box 17 of your W-2.

@DoninGA , any idea how to handle this on the Georgia nonresident return? If I understand correctly, Ijgreen is saying that the Georgia wages in box 16 on his W-2 will be higher than they should be because the employer counts non-workdays as days worked in Georgia. Is there any way that he can adjust the amount of Georgia income on his Georgia nonresident tax return?

@Ijgreen , you didn't say what state you live in. This might turn out to be a minor issue if the state you live in also has state income tax. The higher amount of Georgia income means that the income from your resident state is lower, which will reduce your resident state tax. So the effect is only the difference in the tax rates between the two states. It could even work to your advantage if the tax rate in your home state is higher than the Georgia rate.

[Ijgreen]

@Ijgreen , you didn't say what state you live in. This might turn out to be a minor issue if the state you live in also has state income tax. The higher amount of Georgia income means that the income from your resident state is lower, which will reduce your resident state tax. So the effect is only the difference in the tax rates between the two states. It could even work to your advantage if the tax rate in your home state is higher than the Georgia rate.

I live in TN, so no help there.

[Mike9241]

see a labor lawyer because what they are doing may be"insane" but not illegal from an income tax standpoint or find a different job.

[TomD8]

@Ijgreen wrote: "So I just tell Georgia to ignore what the employer put on the W-2 for the state taxable income and holdings?  Believe I say instead?"

Yes, that's exactly what you do with regard to the state income (but not the withholdings) on the W2.  The W2 as prepared by the employer is often incorrect.  A common example: an employee moves from one state to another, but the employer continues to withhold for the "old" state because of bookkeeping delays, etc.  Your tax return should reflect the actual facts of your situation.  The TurboTax program will allow you to "allocate" income to the proper state.

Since the withholdings reported in Box 17 of the W2 reflect the amount the employer actually withheld, do not edit that amount.  It is Box 16 that may be incorrect.

@rjs 's original answer is correct.  

[SweetieJean]

They claim that cannot use timesheets per the IRS

The IRS is Federal. Why would they care about (or have jurisdiction over) which states' taxes are withheld?