Out of State Income

Apr 16, 2019 2 Replies
S

I'm stumped on this. An employee in State 2 works for a company based in State 1. The company issues employee a W-2 showing all the income is based in State 1, and refuses to correct it.



Employee contacted State 1 and was told that filing a return showing actual income and asking for a refund would be denied because, well, the W-2 shows State 1 income. Employee's CPA doesn't have a clue what to do.



Is there a solution? Other than suing the employer, I don't know what to do.



Thanks for any guidance.



Vote
Twitter Facebook LinkedIn
S

Apparently State 1 will recognize IRS Form 4852, but does not have its own version. I suppose client could fill out a 4852 showing no income, but it would only be correct for the state, and not completely true because she did have federal income.

Vote
Twitter Facebook LinkedIn
A

Contrary to what the t/p says he.she was told by the state tax authorities, a nonresident state tax return should be filed that reflects zero source income to that state with the full withholding and a request for refund. A statement should be attached.

Vote
Twitter Facebook LinkedIn

Join the Discussion

Have something to add? Share your thoughts — no account required.

Didn't find your answer?

Ask the community — no account required