I live in New York and recently started working at a job in New York. I noticed on my W2 that my company has been deducting taxes for New Jersey. I found out the company used to be located in New Jersey but moved before I started. My coworkers get New York taxes deducted so I know mine is wrong. My W2 lists the address for my company as the old address in New Jersey. What do I need to do to fix this?

It is too late for 2008, as those taxes have been sent to NJ state already.

You will need to file a 2008 NJ state tax return and claim a total refund for the withheld NJ taxes.

You will also need to file a 2008 NY state tax return and pay taxes to NY. Attach a copy of the NY state return to the NJ state return to validate your claim that you neither worked nor lived in NJ, but rather are subject to NY state income taxes.

Have your employer correct the withholding for 2009, and refund any NJ taxes withheld for 2009.

Hi,

Can you explain more on how to file a return and claim for TOTAL refund? I went to different people and they do not know how to do this. Please respond as soon as you can.

Thanks
Tara


It is too late for 2008, as those taxes have been sent to NJ state already.

You will need to file a 2008 NJ state tax return and claim a total refund for the withheld NJ taxes.

You will also need to file a 2008 NY state tax return and pay taxes to NY. Attach a copy of the NY state return to the NJ state return to validate your claim that you neither worked nor lived in NJ, but rather are subject to NY state income taxes.

Have your employer correct the withholding for 2009, and refund any NJ taxes withheld for 2009.

In the case of taxes being incorrectly withheld for the wrong state, because you neither lived nor worked there - you file a non-resident income tax form. It will document that you have $0 taxable income in that state, and hence have a $0 tax bill. It also documents the amount of money withheld from your paycheck for that state, and consequently you get a full refund for the amount that was withheld.

Tara:

On the NJ return, file Form NJ-1040NR, and list the NJ income as ZERO, which results in ZERO NJ taxes and claiming all of the withheld NJ taxes as a total refund .

This same thing happened to my husband last year. Got it all refunded and then paid the correct state the amount owed. But now we are getting a 1099-g for that original refund from the WI state. Are we going to have to pay tax on that refund even though we turned around and paid that amount (and even more) to the state of MN?

If you did not itemize on your federal return, then, no, the refund is NOT considered to be income for 2009.