I live in DC and work in VA. Employer mistakenly withheld VA taxes for a few weeks into the year of 2019 before correcting to DC and will not issue a W-2 correction. How do I reconcile this in TurboTax?

[ashleyrisso]

I work in Northern Virginia. My first couple years with the job, I lived in VA until moving to Washington, DC in December 2018. Because of reciprocity in the region, I should only have received just one single W-2 for DC as I lived there the entirety of 2019. Erroneously, payroll was not updated to reflect the change in address until February 2019 (my mistake), thereby taking out VA taxes for the first few weeks of 2019 before switching over to DC. I received two W-2s for 2019- one for about 10% of the year's worth of wages in VA, one for the remaining ~90% of the year's wages in DC.

I reached out to my payroll department to inquire about a W-2 correction to reconcile the misappropriated VA taxes. The department would not issue a correction and has since refused to reply to any of my further inquiries.

Without a W-2 correction, how can I reconcile this information to pay my state taxes appropriately using TurboTax Deluxe's online software? I can request a refund of the taxes paid to VA for the first few weeks of 2019 but I cannot figure out how to report the missing untaxed wages to DC.

[Critter-3]

Easy fix ... simply file a non resident VA return showing zero VA income to get a refund of the erroneous withholding. 

[Carl]

Just to provide clarity here.

will not issue a W-2 correction.

That's because there's nothing to correct. Changing the W-2 *DOES* *NOT* change the *FACT* that taxes were withheld for VA and paid to the state of VA by your employer on your behalf. The state will "NOT" refund your employer. They will only refund *YOU*.

[ashleyrisso]

I am able to get that far. However, this does not reconcile the 5 or so weeks' worth of wages that DC did not collect tax on and I cannot figure out how to prompt TurboTax to account for this.

[ashleyrisso]

Thank you for the clarification. I looked the issue up online and one source stated that a W-2 correction must be filed but your explanation makes sense.

[Critter-3]

DC will tax ALL your income from all sources when you file a resident return ...  do you not see that happening ? 

[ashleyrisso]

@Critter-3 DC does not prompt me for any additional funds after requesting my VA nonresident tax credit back, which cannot possibly be correct as DC has a much higher income tax than VA. I am certain that I should owe a few hundred more dollars to DC.

My DC W-2 reveals a disparity between my Federal Wages (Line 1) and State Wages (Line 16) which equates to the State Wages (Line 16) listed on my VA W-2. Am I correct in assuming that DC should be requesting state income tax on the apportioned VA Line 16 value?

[Critter-3]

Ok ... did you actually LOOK at the DC return yet ???   When you file a resident return ALL your income from ALL sources (no matter what the  state breakdown is on the W-2 form) will be reported on the DC return.  Make sure you are NOT taking a credit for taxes paid to another state since you are not paying any taxes to any other state ... you are getting a full refund of the withholdings. 

[ashleyrisso]

@Critter-3 Are you saying that by filing as a DC full-year resident, it should automatically be taxing me for the full year's worth of wages (Line 1) not the state wages (Line 16)? If so, hard to believe I don't owe DC more than $30.

Let me see if I can break down what I've reported and what I'm seeing to see if it makes sense. My responses to the questions are bolded/underlined. My areas of uncertainty are italicized.

ON VA NONRESIDENT RETURN:

Did you make money in Virginia in 2019, but never live there?: YES

Tell us more about your 2019 Virginia income:

   ✓ I commuted from DC to VA daily

   ✓ My employer mistakenly withheld VA tax from my income

My state of residence is: DC

Your requested refund amount: Autocompletes to Line 17 value from VA W-2 (should this be zero?)

 ✓ Check this box if you are a resident of a state with income tax and you're attaching your resident individual income tax return

---> ISSUES VA TAX REFUND EQUIVALENT TO LINE 17 VALUE FROM VA W-2

ON DC FULL-YEAR RESIDENT RETURN:

Other DC additions to federal income: __________ (should this be left blank?)

Virginia information:

Double-taxed Income: $0 (was not double-taxed, just paying tax in the wrong state for a few weeks)

Tax paid to VA on double-taxed income: $0 (same as above)

---> TAX OWED TO DC = still $30, UNCHANGED AFTER REPORTING THE ERRONEOUS TAXES PAID TO VA

Sorry this is really convoluted. I really appreciate your time and attention.

[Critter-3]

ON DC FULL-YEAR RESIDENT RETURN:

Other DC additions to federal income: __________ (should this be left blank?)   YES

Did you look at the D-40 form yet ???   Is all the income where it needs to be ?

https://otr.cfo.dc.gov/sites/default/files/dc/sites/otr/publication/attachments/2019%20D-40_Booklet....

Before filing,  You can preview the 1040 or print the whole return

https://ttlc.intuit.com/community/accessing/help/how-do-i-preview-my-turbotax-online-return-before-f...

[user107]

I am in the similar situation. What penalty and interest did you have to pay for filing the taxes late?