Wrong State on W-2

February 4, 2008 11:01 AM

My W-2 says I paid taxes to both Indiana and California. However, I did not live or work in Indiana at any time during the year 2007. How do I go about getting this fixed?

I already have a call into my HR department and they said there's currently a 3-day turn around on answering questions. So while I wait for them I thought I'd ask Metafilter and ensure I at least know what to expect.

This is the deal. In 2006 I lived in Indiana for a couple of months before moving to California. For my 2006 taxes (i.e. those I filed by April 15th of 20007) I paid taxes to both IN and CA. This is to be expected and all went fine.

For the entire 2007 year I lived and worked in CA and I've had the same job I had in 2006. My company uses a website to manage most HR things and I updated my address / personal information back in 2006. So there's no reason for them to believe I live in IN.

On my W-2 this year it shows me paying 3k in taxes to IN and 3k in taxes to CA. This 3k to CA is about 2k short of what I was supposed to pay to CA, so I owe CA right now.

Who do I call to get this fixed? What are the right steps? I imagine I need to get my employer to admit the mistake and issue a corrected W-2. However, how do I go about getting my money back from IN? I looked at the tax forms for Indiana non-residents and I don't think they apply to my situation.

I guess I'm just curious to know how this is supposed to go down and get fixed and who I need to involve to get it fixed. Since I have a 3-day turn around time on talking w/ my HR department I was hoping to go into the conversation a bit more informed and hopefully cut down on phone tag.

posted by mto to work & money (6 answers total)

If it was really withheld, Indiana has the money, and you need to file a tax return to get it back. You say $0 Indiana income, it says $0 tax owed, but you withheld $xxxx, so you get $xxxx as a refund.
posted by smackfu at 11:09 AM on February 4, 2008

If the money was actually paid to Indiana the W-2 is correct - do you have old payment stubs on which you can see your tax breakdown?

If you didn't actually pay any tax to Indiana then you need to talk to HR and see what happened. Otherwise just file your taxes with Indiana, get your refund there and then use that to pay off CA. And if you file soon in Indiana and closer to April 15th in CA you could have the money in hand to pay for what you owe if that is an issue.

I has a similar issue changing from NJ to NY - I filled out the form letting them know of the change and it went through everywhere but payroll, which meant I had to do a similar tax dance to make sure all the state taxes got to the right place.
posted by langeNU at 12:19 PM on February 4, 2008

Thanks langeNU and smackfu!

At this point I'm still a little worried about filing IN taxes. The W-2 says I earned money in IN in addition to saying I paid taxes to IN. In fact, my taxable income listed on my W-2 is the same for federal, CA, and IN. So if I file Indiana taxes they'll think I earned money there b/c that's what the W-2 says. So I think I need to get a corrected W-2 which says I have 0 taxable income in IN but paid 3k in Indiana taxes.. Then, once I have the corrected W-2, I file IN taxes and get my refund.

Also, AFAICT, I did indeed pay money to IN.
posted by mto at 2:04 PM on February 4, 2008

I think you have a good handle on what to do now.

I'm still a little worried about filing IN taxes.... I paid taxes to IN.

I have one more recommendation, for when you speak to HR or others. When you refer to "filing IN taxes" it's not really clear what you mean. In context I believe you probably are referring to filing an IN tax return, and not to filing or paying any additional IN taxes, other than what your employer has already withheld.
posted by JimN2TAW at 2:36 PM on February 4, 2008

In the absence of an updated W-2, your income is being split between the two states as it was the previous year. Your HR department cannot legally change your W-2 for you; you've got to fill out and sign a new one. So updating your address on the HR website wouldn't affect tax withholding (though it might have triggered a "come down to HR and fill out a new W-2" e-mail, I should think).

So fill out a new W-2 to end withholding payments to Indiana and then find the Indiana tax form for documenting a change of residence (it may be a special version of the standard tax return form or a separate schedule -- this varies by state). That's what you'll need to file to show zero Indiana-based income justifying a 100% refund of your withheld income. If you do it now, there's a decent chance you'll have the money back before April 15 when you need to pay California.

Sadly, you're probably stuck doing this again next year to recover withholdings from your January 2008 paycheck . . .
posted by gum at 3:34 PM on February 4, 2008

Just to be a little clearer: Think of this as two separate problems. One is correcting your future withholding (the new W-2). You can't change withholding retroactively -- Indiana already has your money.

The other is persuading Indiana to give you your money back by proving you didn't live there at all in 2007 (finding and filing the change-of-residence tax form or schedule for Indiana).
posted by gum at 3:43 PM on February 4, 2008