Question on Double-Taxed Income for Partial residency

[Bruin369]

I moved from CA to DC, and my company changed my address about a month after I physically moved Would that mean I was double taxed for that month or would I report the dates of my residency based upon the date that my address was changed in my company payroll system? My pay stubs stop showing any amount under CA W/h in October 2019 and start showing amounts under DC W/h. Does this mean that I"m not being double taxed?

When I started to fill out my CA return, it seemed like I had to report all my income to California based on the TurboTax example provided (Example 2: X lived in CA at the start of the year. She moved to AZ in May but continued to work at the same job in CA for the rest of the year. She earned $20,000 while living and working in CA and $30,000 while living in Arizona and working in California. Overall X earned $50,000 living or working in CA). I put in my total income for the year since the above example applied to my situation but given that my employer changed my address and after that there was no more CA w/h, do I need to fill out the box that asks to enter the income taxed by both DC and CA and the taxes you paid to CA? For some reason, TurboTax did not autofill this for me. If so, how do I figure out the income taxed by both DC and CA (i.e. double-taxed income) and the tax paid to CA on the double-taxed income?

[MarilynG1]

Since you lived in both California and DC last year, file a Part Year Resident State Return to both states.  

Report only the income earned/taxes paid to that state on the Part Year Resident return.  

You can use the amounts already shown on your W-2 for this, or you can make manual adjustments for the month that belongs to CA but was reported under DC.

Click this link for more info on How to file a Part-Year Resident Return. 

[Bruin369]

Thanks! When I start to fill out the California partial resident return, it asks me how much of my total adjusted income from my W-2s was earned while living or working in California. Based on the example I cited in my original post, would I enter

• the number in Box 1 on my W-2 OR
• the numbers in Box 16 on the two W-2s I received from my employer (one for CA and one for DC)? (I remained with the same employer the entire year)

Or are you saying that I should only report the amount earned while I was physically in California even though the example says otherwise? If this is the case, then do I manually calculate based on the number in Box 1 or use the number listed in Box 16 of my CA W-2?

On the DC partial resident return it asks me to enter any income received while residing outside DC. Would I figure out the percentage of physical time spent in California and multiply that by

• my gross income, 
• the amount listed in Box 1, OR
• would I use the number in Box 16 on the CA W-2 that I received from my employer?

And to clarify, you are saying that I would leave the double-taxed income questions blank because it's not applicable to me?

[MarilynG1]

You are not being double-taxed if you allocate your Total Income between CA and DC.

As you said, you are basically reporting the amount earned while physically present in each state (according to your W-2s). 

Since you received two W-2's with the CA and DC amounts already broken out for you, use those amounts in Box 16 and 17 when reporting each state. 

When DC asks for 'income while residing out of state' subtract the DC amount from your total income and enter that amount.

DC is calculating what % of your total income is from DC to figure your DC tax.

[Bruin369]

Thank you! This is really helpful. I just have one more clarifying question. When you say "When DC asks for 'income while residing out of state' subtract the DC amount from your total income and enter that amount" do you mean total income as gross income or what appears in Box 1? The reason I'm confused is because while I received two W-2s, only one of them has Boxes 1-14 filled out (the DC one). In other words, Box 1 is not split up between CA and DC. The only boxes that are different are Boxes 15-17 since those are state wages and they obviously do not add up to Box 1.  Based on this, I'm not sure what total income you are referring to.

Additionally, for the question where I have to answer how much I earned living or working in CA, the total adjusted income seems to be the sum of my lone Box 1, my spouse's two Box 1 from is two separate W-2s from separate employers, and our HSA contributions.  So I don't think Box 16 is applicable?

[MarilynG1]

The amounts shown in Box 16 on your W-2s for State Wages  (one for DC, one for CA) SHOULD add up to the amount in Box 1, Total Wages for that employer.   If they don't, I can see you are confused! 

You could also take your Total Income (Box 1 amount) divide by 12 and multiply by number of months lived in each state.

However, it is much easier to report if your employer has Allocated your Total Income for you between CA and DC on your W-2s. 

Since we can't see your return in this forum, you may need to request Phone Support if you can't resolve your issue. 

[Bruin369]

Yup. The two Box 16s do not add up to the one Box 1 for my one employer. They add up to a number that is about $4K more than what is shown in Box 1. 

I will reach out to phone support but thank you very much for clarifying! Much appreciated @MarilynG1 .

[Bruin369]

@MarilynG1 another user had the same issue and was given this response: "That is possible, since some states treat certain employee benefits differently than Federal does."

Would you agree? 

https://ttlc.intuit.com/community/taxes/discussion/t[product key removed]-more-than-federal-wages/00...

[AmyC]

Yes, a common one for CA is the box 12 HSA is added to income. Here is a link to full  California instructions.  DC has a few but they are more rare. Here is more from DC. Your Human Resources department should be able to give you the breakdown as well.

[Bruin369]

Thanks. I thought that as well. However, the difference between the sums of my Box 16s and my Box 1 does not equal Box 12 HSA contributions. Would you expect that to match?

[AmyC]

There are some other things that could be in there. I would hope that it is close! Contact human resources and ask them for the break down. If they made a mistake, they can issue a corrected W2. If it is right, they can tell you how those numbers came to be. They have full access to all of your benefits and what is taxable in the states. We don't have that ability in this forum.

[Bruin369]

Thank you for your help! I've reached out to my HR department. Hopefully they can provide some clarity.