W-2's, Two States

[fasteddie577]

Hi, my son worked in Delaware for a couple of years and in June of 2023, he moved back to Texas. He did not change employers during his relocation. In February, he received two W-2's, one for the total 2023 income earned for both states and a second W-2 that shows only the income received while working in the state of Delaware. Is this normal to receive two W-2's like this?  Also, how would the IRS see this? Thank you. 

PS: Let me know if you need any additional information. Thanx.

[CatinaT1]

This can be common. I would assume the W2's are identical except for the state portions. Is that a correct assumption?

He will file a part-year resident return in Delaware and of course Texas has no state income tax.

[Hal_Al]

Q. Is this normal to receive two W-2's like this? 

A.  It's not "normal", but it is common. Apparently the software they use to prepare the W-2s can't handle two states on one W-2.

Q. Also, how would the IRS see this? 

A. It depends on what was mailed to them. Most likely the 2nd W-2 was only sent to DE.

Just make sure you don't duplicate any amounts when you enter it in TT.  Enter only one W-2. On lines 15-20, show the DE info. 

[fasteddie577]

Hi, thank you for the reply. Yes, both are the same except that the income earned in Delaware.  My son's last check stub for 2023 has a running total and it matches the W-2 that has the full year. 

In regard to filing the state return for Delaware, do I only include only the wages earned in Delaware on the state return? If I enter the total 2023 wages he has a big tax liability, when I enter only the state of Delaware earnings it's basically a wash.  Thanks again. 

[ThomasM125]

Yes, the Delaware wages would be reported in box 16 on form W-2 entry, for state wages. As such, that will be the only income from the W-2 wages taxed in Delaware.

[fasteddie577]

Hi again, I noticed that the W-2 that is for the full year has a lower amount for the state wages earned and also has a lower amount for the state income tax paid. This doesn't seem right. Shouldn't the full year W-2 include the full year state wages and income tax paid while in Delaware?  Let me know if you have any questions. Thank you for replying. 

[CatinaT1]

Yes, this is correct. They are showing the amount of income he earned in Delaware while he physically worked in Delaware. This is the Delaware source income amount that Delaware will tax. The money he earned while living in Texas is Texas source income and that is not taxed because Texas has no state tax.

Box 1 of W2 = Wages taxed Federally

Box 16 of W2 = Wages earned while physically working in the state and amount taxed by the state

[fasteddie577]

Thank you.