W2 part time resident 2 states; only taxed for one

[tarrrwheels]

I was a part-time resident of Virginia until August, then moved to North Carolina to work remotely while still being employed by a company based out of Virginia through the rest of the year.

As an example, my entire yearly income is $100,000.

My W2 shows my entire income was taxed as state income in Virginia despite informing my employer that I was moving to a different state.

(example: state wages: $100,000, state income tax: $6,000).

Income in North Carolina was not taxed in North Carolina but still is reported as state wages.

(example: state wages: $30,000, state income tax: $0).

If I file as a part-year resident in NC, it shows that I owe state taxes for the $30,000 state wages that were earned while living in NC but were taxed by the State of Virginia. Can I claim Tax Credits in my North Carolina part-time resident tax return for state income tax paid in Virginia?

Or will I need to have my W2 corrected to reflect my move to North Carolina by my employer before filing my return?

[SharonD007 · Accepted solution]

No, you will not need to have your W-2 Form corrected. When you completed your part-year resident tax return for VA did you allocate the income that you made while living in VA until August?  Based on your example, it would be $70,000.  VA should only be taxing the amount that you made while you lived there.  You should either get a refund from VA or a credit in NC.

Review your entries to ensure that you allocate your income to the correct states. If you did not prepare the state that you moved from first, followed by the state you live in now then you will need to delete the state returns and start over.

Please review the TurboTax article How do I file a part-year state return? and How do I allocate (split) income for a part-year state return?

[tarrrwheels]

Understood, I will make those changes.

Thanks for your help.