Moved job and domicile from Virginia to Tennesse (no state income tax) during 2023.
My company records did not reflect this until later in the year. They have greatly overstated my Virginia income. They refuse to provide a corrected w-2.
How should I file my taxes with correct state income, while avoiding an audit when the state sees a different income between w-2 reported and my Part Year Tax filing?
and should I contact the IRS because company refuses to correct? Which is what I think I should do to possibly prevent an audit.
It's common for employers to be late in updating an employee's information when the employee moves to a different state during the tax year - resulting in incorrect information in Boxes 15-17 of the employee's W-2.
My recommendation is to enter your W-2 as is. Then, on your part-year resident Virginia tax return, allocate the correct amount of income to Virginia (do not change the withholding amount in Box 17). ALL the income you earned prior to the date you began living in TN is taxable by Virginia. Virginia will refund any excess withholding. (My answer assumes that you had no income from VA after your move.)
If VA questions your return, simply explain what happened just as you did here.