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chefturnee83
New Member

Not sure what I can do but my employer never updated my address when I moved last year. Now my old state is telling me I'm going to be charged as a full year resident.

My employer never updated my address when I moved to Indiana last year. Because of this I was charged taxes as a full year resident of Kentucky. Per HR when I first filed, I split the income up using my pay stubs based on when it was earned and filed partial residency returns with Indiana and Kentucky with that info. Indiana processed fine and I paid the taxes owed for the error. Kentucky is saying that unless I get a corrected W2 showing otherwise, I need to file an amended return as a full year Kentucky resident because that's what the W2 says I am. First off by doing this, I would have to pay them additional taxes instead of getting the refund it was showing I was owed when I originally filed for being a partial year resident which balanced out the payment of taxes owed to Indiana. Second, wouldn't that be lying to the department of revenue?  I spoke with HR  and they told me that payroll will not give me a corrected W2. It seems odd that they are telling me that I need to file/pay as a full year Kentucky resident even though I have not lived there for that time frame and all of my identification, lease, etc. shows otherwise. Even if I did do that, what happens with the money I already paid Indiana?

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Accepted Solutions
DanielV01
Employee Tax Expert

Not sure what I can do but my employer never updated my address when I moved last year. Now my old state is telling me I'm going to be charged as a full year resident.

Either you pay that tax to KY or to Indiana but not to both.  I agree with your version of it, that you are correct in filing a part-year return through allocating your income.  Your company cannot supply you with a corrected W2 because they withheld KY tax on (XX) income.  They can't un-report that.  

I believe that if you can show proof of residency to KY (change of move and residency to Indiana), that KY should respect your allocations.  If you renewed your driver's license with Indiana, have a lease contract you can show them, or something else similar, they will split the income.  (KY and Indiana are reciprocal states but part-year situations are not technically covered by reciprocity).

If this does not work with KY, then your next option is to file an amended Indiana part-year return.  In this case, you will claim a credit on the return for the taxes you paid to KY while living in Indiana, and get back the Indiana taxes you just paid at least.  You would supply Indiana a copy of the KY return showing that you must claim all of the income to KY.

Either way, you don't pay taxes to both.  You either get back the KY portion from KY, or you get back the taxes you paid to Indiana.

Going forward, you pay state taxes to Indiana.  If you are working in KY and pay a local tax in KY, you will be able to claim a credit on the Indiana return for KY local taxes.  That will be next year.  Feel free to comment back if I can assist you further with this year.

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3 Replies
DanielV01
Employee Tax Expert

Not sure what I can do but my employer never updated my address when I moved last year. Now my old state is telling me I'm going to be charged as a full year resident.

Either you pay that tax to KY or to Indiana but not to both.  I agree with your version of it, that you are correct in filing a part-year return through allocating your income.  Your company cannot supply you with a corrected W2 because they withheld KY tax on (XX) income.  They can't un-report that.  

I believe that if you can show proof of residency to KY (change of move and residency to Indiana), that KY should respect your allocations.  If you renewed your driver's license with Indiana, have a lease contract you can show them, or something else similar, they will split the income.  (KY and Indiana are reciprocal states but part-year situations are not technically covered by reciprocity).

If this does not work with KY, then your next option is to file an amended Indiana part-year return.  In this case, you will claim a credit on the return for the taxes you paid to KY while living in Indiana, and get back the Indiana taxes you just paid at least.  You would supply Indiana a copy of the KY return showing that you must claim all of the income to KY.

Either way, you don't pay taxes to both.  You either get back the KY portion from KY, or you get back the taxes you paid to Indiana.

Going forward, you pay state taxes to Indiana.  If you are working in KY and pay a local tax in KY, you will be able to claim a credit on the Indiana return for KY local taxes.  That will be next year.  Feel free to comment back if I can assist you further with this year.

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chefturnee83
New Member

Not sure what I can do but my employer never updated my address when I moved last year. Now my old state is telling me I'm going to be charged as a full year resident.

Thank you for your help. It is very much appreciated. Hopefully I won't have any issues next year. I have verified that the information has been updated with my employer for 2019.
DanielV01
Employee Tax Expert

Not sure what I can do but my employer never updated my address when I moved last year. Now my old state is telling me I'm going to be charged as a full year resident.

Next year you won't.  You'll be a full-year resident of Indiana, so if any KY taxes were withheld at the beginning of the year, you can file a reciprocal nonresident return to have any KY taxes refunded.  But if your payroll company did things correctly you won't have to worry about this either.
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