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W2 two states, same employer
I transferred from NE to NY with the same employer, so I have one W2. I lived in NE for 9 months and NY for 3 months. The wages listed for NE are correct, but the wages listed for NY are what I earned for the whole year, not just three months. Is this correct?
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On NY return you will report income for 3 months. If you are resident of NE, report your total income for the year. Claim credit for taxes paid to NY. Your U.S. Tax Return: Working or Living in Two or More states |
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Originally Posted by sbfegley
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While re-issuing the W-2 is the preferred solution, it may not be possible.
If so, then you need to properly pro-rate the income between Nebraska and New York on part-year state tax returns for both states. Once that is done, MAIL (do not efile) the state returns to the respective states and attach a copy of the OTHER state tax return to the mailed copy to show the state how you pro-rated the income. Providing a copy of the other state return answers any questions before they can be asked by the state tax authorities. |
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After digging a little more I found the following. Does this mean I will have to pay taxes in NY on the full income, since I have only paid for the amount I actually earned?
IMPORTANT NOTICE REGARDING NEW YORK INCOME TAX In 2003, the state of New York changed the requirements for reporting wages earned to the state. If you earned wages in New York and at least one other state, the following W-2 wage reporting requirement may have affected you: “The amount of wages that must be reported in the State wages, tips, etc. box [Box 16] on the federal Form W-2 is the same as the amount of federal wages required to be reported in box 1, Wages, tips, other compensation.” (New York State Dept. of Taxation and Finance, Article: TSB-M-02(3)I / Income Tax /May 1, 2002) Based on this statement, the amount of wages shown in Box 16 on your W-2 must show the same value as Box 1, even if the actual wages earned while you were in New York were less than the Box 1 amount. |
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No, it means that, even though you will pay taxes only on the income earned within NY state, you will pay at a tax rate that factors in ALL of your income.
BOTTOM LINE: The NY state income will be taxed at a HIGHER rate of taxation. The reporting adjustment you found insures that the employer reports ALL of the income you have earned so that the NY state tax authorities have a paper trail of that income. |
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