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What to do when my only W2 shows AZ state taxes, but I worked in MO state

Hi, 

I worked for a large company from 1/1/22 to 7/13/22 in Missouri, then laid off. I moved to Arizona on 8/3/22 and lived with family while looking for a job. I did not earn anything in Arizona. My W2 shows only Arizona wages and tax withholding, nothing for Missouri. I am filing as Single. 

Should I file taxes only in AZ, or only in MO, or in both states? Did my employer make a mistake in the W2? It seems I come out ahead if I file only in AZ.

Thanks! 

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1 Best answer

Accepted Solutions
GeorgeM777
Expert Alumni

What to do when my only W2 shows AZ state taxes, but I worked in MO state

Following up on the comments from @AmyC, it appears you were a part-year resident in MO because you were only there for seven months.  You would file as a full-year resident of MO if you were there for the entire year.  For tax year 2022, if you intended to make AZ your new residence, then you would file as a part-year AZ resident because you lived there for five months in 2022.  

 

It appears that all of your income was earned while you lived in MO, and therefore, your income is MO source income.  Because you were not a resident of AZ, you should file a tax return to claim a refund for all that tax withholding that was paid to AZ while you lived in MO.   Income is generally taxed from its source. That is, the state where you worked and received compensation for that work, is the state that can tax the income.   

 

Thus, based on your post, it appears you would file as a part-resident for each state, but with regard to AZ, you will need to allocate all of the income you earned to MO.  You should see a screen in TurboTax that will ask how much of your income was earned from a MO source and how much was earned from an AZ source.  Based on your post, it would appear that you would allocate all of your income to MO and none of it to AZ.  These screens will appear when you prepare your state taxes.  First, prepare your federal return, then move to MO, and lastly prepare your AZ return.

 

@JR108 

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4 Replies

What to do when my only W2 shows AZ state taxes, but I worked in MO state

I recognize that I will have to file in AZ, e.g., to get the AZ holdings refunded if I owe taxes only in MO. 

AmyC
Employee Tax Expert

What to do when my only W2 shows AZ state taxes, but I worked in MO state

You should contact the employer for a corrected w2 showing your MO wages and not AZ wages. You can file an extension for time to file, not to pay. Any payment would be due today and can be paid to MO here.

 

Otherwise, file an AZ and a MO and be prepared to explain to AZ why you have a w2 showing AZ income and proof to refute that it is not taxable. MO will be happy to take your money with no known income.

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What to do when my only W2 shows AZ state taxes, but I worked in MO state

Thanks a lot, Amy! I received the corrected W2, which shows AZ income = MO income = Federal income, and withholding of state taxes both in MO and AZ. While I have asked the company to explain why AZ is on my W2 at all, I think I will file MO taxes as a resident (worked for 7 months there before moving to AZ to stay with my parents as I look for a new job), and file AZ taxes as a non-resident. Does that make sense? 

GeorgeM777
Expert Alumni

What to do when my only W2 shows AZ state taxes, but I worked in MO state

Following up on the comments from @AmyC, it appears you were a part-year resident in MO because you were only there for seven months.  You would file as a full-year resident of MO if you were there for the entire year.  For tax year 2022, if you intended to make AZ your new residence, then you would file as a part-year AZ resident because you lived there for five months in 2022.  

 

It appears that all of your income was earned while you lived in MO, and therefore, your income is MO source income.  Because you were not a resident of AZ, you should file a tax return to claim a refund for all that tax withholding that was paid to AZ while you lived in MO.   Income is generally taxed from its source. That is, the state where you worked and received compensation for that work, is the state that can tax the income.   

 

Thus, based on your post, it appears you would file as a part-resident for each state, but with regard to AZ, you will need to allocate all of the income you earned to MO.  You should see a screen in TurboTax that will ask how much of your income was earned from a MO source and how much was earned from an AZ source.  Based on your post, it would appear that you would allocate all of your income to MO and none of it to AZ.  These screens will appear when you prepare your state taxes.  First, prepare your federal return, then move to MO, and lastly prepare your AZ return.

 

@JR108 

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
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