W-2 with state didn't work or live in

[Colmatt]

Client received W-2 with income and withholding for MA when he really lived in NC and CT during the year.  He put MA (parent's home) as mailing address for new CT company because he didn't know where he'd settle and thus they withheld MA.  I'm very comfortable with multi states and non resident states but it's coded MA and withheld.  Is there a place on return to back that info off MA or should I just attach explanation?  Not sure how to proceed.

Thanks

[BobKamman]

I think you have to file a Massachusetts nonresident return showing zero income from Massachusetts.  And the people in Massachusetts will say to themselves, "How convenient he now claims residency in a state with no income tax."

[Colmatt]

Funny except CT does have state tax.  Not sure where to enter on MA to match W-2 and then to back out.  Any idea?

Other times this has happened and the state came back few years later asking for proof of no residency...trying to head this off.

[sjrcpa · Accepted solution]

There's no backing out. You file a Mass nonresident income tax return showing zero income earned in Mass.

[itonewbie]

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@Colmatt wrote:

...He put MA (parent's home) as mailing address for new CT company because he didn't know where he'd settle and thus they withheld MA...

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Sounds like a telecommuter we have here.  I wouldn't buy this story and would ask for more info.

Except for those couple states that tax NR who do not telecommute for the convenience of the employer, the rules are relatively straight forward.  Compensation is sourced to the state where services are performed - where the individual settles is irrelevant.

• Even if the client didn't know where he would reside ultimately, there should be no question where services were being performed.  The client should have reported to payroll where services were being rendered and had taxes withheld to that jurisdiction;
• If your client was in-between moves and he's from a domicile state, tax residency by domicile does not terminate until it is established elsewhere; and
• Depending on the type of activities conducted and the role of the individual, this could also create corporate tax exposure.

[Accountant-Man]

W2s you shouldn't mess with. Some people are really too stupid to have jobs.

When I have a person who still claims his parents' home as his address, I use "c/o 123 Main Street" or else the state will make a claim. And they will.

I also started this year giving copies of their new state's driver licensing laws, since so many people ARE BREAKING THE LAW by not getting a new license when they move.

Shame on them for trying to save on auto insurance costs. Shame!

[itonewbie]

Agree.  And MA is one of the more aggressive states.