My residence is in North Carolina but I stay in Georgia during the week for work. Which state gets state withheld taxes?

[bsharples151]

My wife and I moved to North Carolina from Georgia at the end of March 2019. My job is in Georgia and I stay with my brother in Georgia during the week. My W-2 shows my address as my brother's address and taxes were withheld for Georgia. Is this correct? I believe NC would consider us to be residents of NC since we are registered to vote in NC and our cars are registered in NC. Have our taxes been withheld for the wrong state? If so, what can we do about it?

[JulieS · Accepted solution]

For 2019, you are part year residents of both states. You lived in Georgia for two or three months and you continue to work there. 

State tax is withheld based on where the work is done, so even if you change your address to your North Carolina address, they will still withhold Georgia taxes as long as you are working in Georgia. 

You will have to file a Georgia part year resident tax return. If you have income in North Carolina, you may have to file a North Carolina part year resident return as well. 

For 2020, you will have to file a non-resident Georgia tax return and a resident tax return in North Carolina. You will able to take a credit for the taxes paid to Georgia on your North Carolina tax return.

[bsharples151]

So to clarify, I will file a Georgia part year resident return for 2019. I did not have a job in North Carolina so I don't have to file a North Carolina return at all, correct?

The address on my W-2 shows my brother's Georgia address as my mailing address. Does that affect which state taxes are withheld for or does the company know that I work in Georgia and they withhold Georgia taxes regardless of my mailing address on the W-2? Would I be better off just changing that address to my North Carolina one?

[JulieS]

Yes, you will file a Georgia part-year return. If there is no North Carolina income, you don't have to file there for 2019.

You should change you address with your employer, but they will still withhold Georgia taxes from your pay, because you are working in Georgia.

In 2020, you will have to file a North Carolina return. Their tax rate is higher than Georgia's so you may have a balance due.