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Out of State Income

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.

Reply to
Stuart O. Bronstein
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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.

Reply to
Stuart O. Bronstein

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.

Reply to
Alan

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