What to do with the multiple corrected W2s I received from my employer due to incorrect state wages?

[Tyler550]

Due to the pandemic, I began working from home in WA (no income tax state) instead of at the office in OR (has income tax) early last year.  The company didn't officially switch my state from OR to WA until August.  So my original W-2 was showing the State Wages, tips, etc. (Box 16) being much higher than it should be.

I've been working with Payroll to get this corrected, who is working with ADP.  Basically, the income I earned in OR (Box 16) should be about 20% of what it shows and I should be getting back almost all of the tax I paid to OR.

Since I started this in January, ADP has sent me five corrected W-2s.  Not a single one has shown an amount in Box 16.  The first had everything zeroed out (literally every box).  The second showed some adjustments to Fed Wages, Tips, etc. but also less Fed Income Tax Withheld (box 2), which isn't correct because I actually did pay the amount listed on my original W-2.

I won't go through each one, but Payroll is tell me I need to enter all of them and it will come out right in the end.  Well, I did that and it tells me I owe $20k, which is wildly incorrect.

Monday is tax day and I don't know what to do.  My understanding is I should receive one single corrected W-2 that I file along with my original W-2 and that's it.  I can't see any other choice but to file an extension at this point, but I still have no idea how this is going to get resolved.

[DanielV01 · Accepted solution]

Filing an extension is not a bad idea if you don't think you can get this resolved before May 17th, but chances are that you can fix this without even getting a "corrected" W-2 (which payroll companies don't often provide expeditiously).

Oregon specifically stated that they will not tax a telecommuter who is a Washington resident working from home during the pandemic instead of in the Oregon office where they would be taxed.  However, as you mentioned, it took payroll a while to catch up to this provision and additional (unnecessary) Oregon taxes were withheld and remitted.  So, if you actually do get a corrected W2, that corrected form will not correct the tax withheld.  You will need to complete your Oregon return to get a refund of the excess withholdings.

When preparing your Oregon return, the program assumes that the income reported on the W2 is the proper amount to file for Oregon.  However, the return should have override fields that you can state the actual amount.  You may need to go through your paystub history to determine when you stopped physically working within Oregon, and use the "total state income year-to-date" field to report that specific amount.  Then the program will calculate how much tax you pay on that income and compare that to what was withheld.  Since you were withheld past that point of time/income in the year, you should get a decent refund amount.

When you make alterations like this, some states do not allow you to e-file, so be prepared to mail in the Oregon return along with proof of why you are claiming the amount of income you are claiming to Oregon should they ask for it.

[Tyler550]

Thanks very much Daniel. I just reached out to my contacts in payroll and synopsized this for them. They are now going to manually fill out the corrected W2 with my numbers and send to me and ADP.  So I think this should be be resolved today (fingers crossed).  They tell me that ADP switched their system earlier this year, so every time they changed one number, it sent me a new W2-C.  Why they couldn't have just done this manually to start with, I don't know.

Really appreciate the response!