State Taxes
January 20, 2004 3:49 PM   Subscribe

In April I moved from Washington state, which has no state income tax, to Vermont, which does. I just got a W2 from an employer. The employer took out state taxes for Vermont, as well as for California where the work was done. Do I have to file a tax return in California to get my eleven dollars back? I'm not looking for binding tax advice, but has anyone been through this before -- filing state taxes in multiple states, or having employers withhold for multiple states? What's standard operating procedure here?
posted by jessamyn to Law & Government (8 answers total)
I moved from Michigan to Illinois 7ish years ago and I believe I filled out a "partial year resident" form in addition to the standard 1040 forms for each state. It wasn't as terribly nightmarish as I had imagined.
posted by mathis23 at 4:00 PM on January 20, 2004

I realize this is Illinois-specific, but maybe it can give you some idea of what you're looking for (from the Illinois Dept of Revenue website)...

If you are a part-year resident (i.e., you were a resident of Illinois for part, but not all of the year), you must file Form IL-1040, Individual Income Tax Return and Schedule NR, Nonresident and Part-Year Resident Computation of tax, if:

-you earned income from any source while you were a resident,
-you earned income from Illinois sources while you were not a resident, or
-you want a refund of any Illinois Income Tax was withheld.

posted by mathis23 at 4:10 PM on January 20, 2004

I did this when I moved from NY to CA - the partial year stuff isn't as onerous as you'd expect, and if you use Turbo Tax or something like that, it is pretty automatic.
posted by judith at 4:19 PM on January 20, 2004

It's not really a part-year issue, I think. Basically, if you work in a state, you are subject to that state's tax laws, regardless of where you live or where your job is usually located. So if you usually work in Vermont, but do five days' work in CA, CA tax is withheld. (California has been especially obnoxious about this sort of thing; even before their recent financial difficulties, they claimed that retirees outside of California had to pay CA taxes on their pensions if those pensions were earned based on work done in Cali. I think they may have backed off that one, at least a bit.)

Expect this sort of thing to become even more common as states continue to feel financial pressure.
posted by Zonker at 4:29 PM on January 20, 2004

Sorry, that third sentence should have been "So if you usually work in Vermont, but do five days' work in CA, CA tax is withheld from your wages for those five days".
posted by Zonker at 4:31 PM on January 20, 2004

You'll probably only have to definitely file Vermont state taxes, as a part-year resident. Washington is out because they just don't have income taxes. You may have to file California, but most states have a rule that if you make less than X dollars in that state, you can choose not to file. If such is the case and you still care enough about the $11 to file, you need to file as a non-resident. Most states have the non-resident/part-year-resident/resident distinctions; I'd assume that California and Vermont are similar.
posted by The Michael The at 4:35 PM on January 20, 2004

As a part year resident in New Jersey and Mass. I needed to file an additional form. Most of the wages were so small and the state minimum return that is wasn't worth filing the paper work. Sounds like $11 isn't going to be that much to worry about anyways. If I were you, I would look into the moving itemization threshold. Residence and location of work must be 300 miles or more from prior employment.
posted by brent at 5:26 PM on January 20, 2004

If I recall correctly from my wandering days, Zonker is mostly correct, in that most states (including California) require you to pay taxes on work done in that state. However, the good news is that you can usually get credit for taxes paid in another state when you file a tax return in the state you are a resident of. So, for example, if you file a return in Vermont, they will likely have some additional form you can use to credit taxes paid in California towards the taxes you owe Vermont. However, in order to do this, you can't just list the actual amounts deducted from your paycheck. You must file as a non-resident in California, and calculate the actual California tax liability when filling out the Vermont form.

Please look up the tax laws of Vermont specifically, however, as not only do state tax laws vary from state to state, but it has been at least eight years since I've had to file taxes in that manner.
posted by EatenByAGrue at 5:36 PM on January 20, 2004

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