Wrong State on W-2

[BHoffman]

My client's employer mistakenly allocated about $6,400 in wages to the state of Ohio and says it can't be corrected. The client was advised to file an OH tax return as a nonresident.

Does anyone have any advice?

I've prepare the OH return, but can't efile it since there is no city or school district.

Very messy.

Thanks!

[Roland Slugg]

My client's employer ... says it can't be corrected.

Of course it can be corrected. Any incorrectl tax filing can.

But WHY were $6,400 of wages reported to the State of Ohio? Are you absolutely sure none of the employees wages were earned while working in that state?

If the W-2 is, indeed, wrong, I don't think I'd advise the client to file an Ohio return as a nonresident unless there was Ohio withholding to be recovered.

[BHoffman]

The W2 is wrong and we are filing to recover some of the withholding. The employer admitted the mistake. I advised the client to insist on a corrected W2. The client said she'd rather not. So, at least for now, I'm preparing the NR OH return. My big question is whether OH is going to send any notice since there is no school district or city tax form.

I'm planning on a paper filed return with a statement of explanation attached.

[Snaggletooth]

and says it can't be corrected.

What he means is that no one WANTS to correct it. If Ohio is not a legitimate state for source income, then the employee should hold employer accountable for any increase in tax, or ugly letters that come from Ohio this summer if he doesn't file it. Beth, you been around long enough to know this kind of stuff when you hear it.

By the way, you mention Ohio is blocking e-mail for lack of a school district. More and more gatekeeping functions are being added to e-filing, and of course many of these require information that the preparer doesn't have. Alabama has just this year required drivers' license (I believe so they can tap refunds for dollars owed to the state for whatever reason). Much of this additional information has very little to do with taxation, and is simply an attempt by these taxing authorities to datamine for extraneous information.

My response to this is explaining to the client what is happening, and giving them the option of jumping through the hoops or just doing a paper return. My guess is that NONE of these states want to roll back the clock 20 years and process millions of paper returns, but that would be appropriate enough in my opinion.

[BHoffman]

Snags - Hmmmm "...been around long enough..." Oh, so long. So very, very long. Some days it just feels like forever.

I can say that I've been all over this with the client and she wants to just file an OH return and be done with it. Just never seen anything like this before.

[Burke]

VA has a special form 763-S (one page) to do this. Have to paper file and attach W-2. Maybe OH has something similar? How about paper filing with OH IT-HELP?
And you did not specify but was the OH state tax actually paid to OH? Or did the employer just mis-type the state name on the W-2? Don't understand why it is asking for county and/or school district for a non-resident return.

[kathyc2]

I've e-filed non resident OH returns and put 9999 in school district without problem.

[BHoffman]

Burke, the tax was actually paid to OH. I have been goofing around with the return and entered 0 on the NRC form for Ohio wages and that gets a refund of the tax withheld $153. I will look for the HELP form.

Kathy, thanks for the info.

[Burke]

I think the HELP form is for when you have to file by paper. If you can get it to go e-file, you will probably be okay.

[taxea]

The W2 is wrong and we are filing to recover some of the withholding. The employer admitted the mistake. I advised the client to insist on a corrected W2. The client said she'd rather not. So, at least for now, I'm preparing the NR OH return. My big question is whether OH is going to send any notice since there is no school district or city tax form.

I'm planning on a paper filed return with a statement of explanation attached.

I agree with Suggs...if client won't get it corrected someone needs to. I would not file I W-2 that is incorrect.

[MRTAX4EA]

Does the pay check stub show ohio w/h?

Is the T/P really out the OH withholding or was the W-2 just misprinted? If filing as a non-resident it would be a problem since OH like other states considers total income and then applies highest state rate to the earnings. Possibly that would give the T/P some kind of credit on the resident state return. Interesting situation, too bad the employer (or payroll company) won't cooperate. On the bright side at least they didn't withhold for some Ohio city. THAT would be hard to get back (IMHO).

[BHoffman]

Is the T/P really out the OH withholding or was the W-2 just misprinted? If filing as a non-resident it would be a problem since OH like other states considers total income and then applies highest state rate to the earnings. Possibly that would give the T/P some kind of credit on the resident state return. Interesting situation, too bad the employer (or payroll company) won't cooperate. On the bright side at least they didn't withhold for some Ohio city. THAT would be hard to get back (IMHO).

Not a misprint. I filled out OH form NRC allocation and overrode the entry in the Ohio wages column to zero. That gets the full refund of the tax ($153). I am also attaching a schedule to the return to explain the payroll error. Hoping it's a small enough issue to just sail through. The client is getting a letter from her boss explaining and confirming that it was her error. If OH decides to press the matter, we can deal with it then.

[Burke]

I agree with Suggs...if client won't get it corrected someone needs to. I would not file I W-2 that is incorrect.

If the employer actually paid the taxes to OH, there is no choice but to file with OH to get it back. The only thing the employer could correct at this point is to show OH wages as "zero" with the amount of withheld taxes, and on the next line show the proper state info for wages, but zero tax withheld. Poster's solution should work and is much easier to accomplish.

[TAXNJ]

Ohio

...... I am also attaching a schedule to the return to explain the payroll error. Hoping it's a small enough issue to just sail through. The client is getting a letter from her boss explaining and confirming that it was her error. If OH decides to press the matter, we can deal with it then.

Maybe a smart move on your part if someone reads it but if audit happens at least it was presented with the return.

Did you contact the Ohio Division of Tax for their opinion?

Interesting employer who has time and effort to write an explanation letter of their error BUT not a corrected W-2!! Doesn't make sense from a business perspective.

[BHoffman]

The client works for a large-ish company with a corporate office. I think her boss made the mistake and doesn't want to get into "trouble" with the upper eschelon. My client likes her boss and so here we are.....sigh.