State Witholding Tax Question (Live in GA, Work remote for a company in SC)

[jtwcarboy]

My employer is in SC and witholds SC taxes currently.

I live in ga and work in ga,  sometimes maybe 1-2 times a month i may do a meeting in SC but thats about it.

My understanding is that the employer should be witholding only GA taxes for me but thats not the case.

While i will work to fix this, assuming its not fixed,  I assume ill file a SC tax return non-resident and then GA will give me a credit for taxes paid to SC when i file GA return? Anything else i should know or do about this ? 

I will get it fixed but its not something i can control so for this year im in this situation.  Thanks !

[tagteam]

@SteamTrain, @DoninGA, @jtax ?

[Hal_Al]

Because you do physically work in SC ("sometimes maybe 1-2 times a month I may do a meeting in SC "), you do have to file a non-resident SC tax return and  pay SC  for that portion of you salary allocated to the time in SC.  GA will tax all your income (even the days in SC) and allow a credit for the small amount you pay to SC. 

Ideally, you employer should withhold both SC (a small amount) and GA tax.  If they unwilling to do that, you should make quarterly estimated payments to GA to avoid an "underpayment penalty".

[jtwcarboy]

Thank you

so the over payment to sc which had already been paid, does that just get refunded to me by SC each year ?  So I pay ga out of pocket , get refund of overpayment from SC based on time in state / actual taxes etc ?

[Hal_Al]

Q.  So the over payment to SC which had already been paid, through withholding,  does that just get refunded to me by SC each year ?  

A. Yes.

Q. So I pay GA out of pocket , get refund of overpayment from SC based on actual calcultaed tax based on  time in state ?

A.  Yes.

[jtax]

For more info see file:///C:/Users/jon/Downloads/2023_IT-511_Individual_Income_Tax_Booklet.pdf

page 24 (pdf page 25).

re: withholding and overpayments. Remember withholding is only an estimate of you taxes. It is usually wrong one way or the other. The goal is #1 to make sure you have the cash to pay when filing your return if it were too low, #2 to get as small a refund as possible (because that is an interest-free loan to the state), and #3 make sure that there is no penalty/interest for not paying enough during the year. 

After you do your first year of this, you will see whether the amount actually owed (not withheld) to SC is large enough to require withholding or estimated tax payments.  If not don't worry about it. If so get the right amount withheld or make estimated payments. For more info on the SC rules applying to non-resident withholding you might start with https://dor.sc.gov/resources-site/lawandpolicy/Advisory%20Opinions/RR22-3.pdf

page 5-6 and examples 3 and seem relevant

I think your employer should only be withholding to SC on the part of your salary that was earned while in SC and 100% of your salary to GA.