How do you suggest reporting client's state taxes if resident state and source state are different?

[Futch2010]

Client worked for an employer based out of TN but lived in NC until February 2021.  Then client moved to GA, however, the employer continued withholding NC.  The state source of income is based on the W-2, however, it should have been changed to GA.  Any suggestions on how to handle this particular issue?  Client is aware that he should be paying GA taxes.

[sjrcpa]

Handle it correctly. NC wages for the period he lived in NC are taxable to NC.

GA wages for the period he lived in GA re taxable to GA. Your client will likely owe GA and get a NC refund.

If he hasn't done so already have his employer stop withholding NC tax and ask to withhold GA tax.

[Futch2010]

Yes, but ProSeries won't allow me to change the Source State on the part-year resident worksheet to only part of the income to GA and part to NC.  The software should use the dates to apply the ratio but it isn't and I'm thinking it's because the W-2 has the entire amount of income as NC (which is the Source State), not part NC and its withholding and part GA and its withholding, like it should if the employer did it correctly.

[rbynaker]

Get paystubs for the pay periods around the move.  Use the YTD totals and enter the correct taxable wages at the bottom of the W-2 Wks.  Then you won't have to fight with the PY Allocation Wks later.

[Futch2010]

I don't see a section on the W-2 Worksheet to enter the YTD Totals and correct taxable wages.  Am I missing something or are you using something other than ProSeries Basic?  Additionally, when I just enter the W-2 with the correct wages for NC and GA, I still have to enter a GA W/H state tax ID number, which I do not have.  Then another error occurs.  Any suggestions would be great.  Thanks!

[rbynaker · Accepted solution]

W-2 boxes 15-17 for state wages.  GA is a pain, I would either enter all 0s or just use the federal EIN.  There's no withholding right so nothing for their computer to match up?  We're just trying to convince ProSeries to report the correct wages to the correct states.