W2 with 2 states listed

[ruthc]

Have a client that lives in MA and works in CT. His W2 listed the CT wages (same as the federal) and the withholding for CT. That same W2 also lists MA wages as -0- with some (minimal) withholding $. I don't know how to handle the MA part. I can't enter the MA withholding without any wages. I can't enter it and put the same wages as the CT wages. I had this same problem years ago with another company and was told from TaxAct that I would have to paper file the return. There has got to be a solution. I am sure other preparer's have the same problem at times. Has anyone run into this problem and have worked around it? Appreciate any help!

[taxea]

You say MA has minimal w/h. Does it exceed your fee to file the State return? If not,Ask the client whether he is willing to forgo the refund.

[ruthc]

Have to file MA return

Yes, he needs to file the MA (spouse has wages, etc). I can get around it by subtracting $1 from the CT and adding it to the MA wages. But the MA withholding will be higher than the $1 wages. I tried the e-filing without actually submitting it for e-filing and it will work. I don't know if it will be rejected by MA showing higher W/H than wages. As much as I hated to, I spoke with the prior preparer and he said he didn't list any wages for MA but did the withholding and it worked fine with Drake. So it looks like it may be a problem with being able to do it with TaxAct.

[ruthc]

OK. Here's more info!

I am filing a federal, CT non-resident, and a MA resident. It's the husband and wife who both works. He only works in CT and she only works in MA. He has 2 W2's with the same problem from different companies. Both of them posted the same wages in the CT and MA box line 16. MA should not have any wages. So total wages are doubled the federal wages. Both states have withholding in box 17. I posted the W2's info to the proper W2 to flow to the state's returns. Of course I can't have any wages in MA because he didn't work there. And I can't have a W2 with federal wages, no MA wages, with MA withholding. So I think I should enter $1 in MA wages even though it's lower than what was withheld.

[taxmom34]

Mass taxes residents for income from other states, such as CT , RI etc. they get a credit for taxes paid to the other state. sounds like you are filing correctly but his CT income is also Mass income.
haven't done one of these in years, maybe other Mass preparers (like Atsman) will verify.

[ruthc]

Other info

I forgot to mention that the couple lives in MA.

[taxmom34]

maybe you should have mentioned the states involved, looks like Mass preparers are not seeing your post. Mass residents are taxed on income received from Mass and other states. the W2 sounds like it is right, the Ct income is included for Mass resident.

[ATSMAN]

Yes, he needs to file the MA (spouse has wages, etc). I can get around it by subtracting $1 from the CT and adding it to the MA wages. But the MA withholding will be higher than the $1 wages. I tried the e-filing without actually submitting it for e-filing and it will work. I don't know if it will be rejected by MA showing higher W/H than wages. As much as I hated to, I spoke with the prior preparer and he said he didn't list any wages for MA but did the withholding and it worked fine with Drake. So it looks like it may be a problem with being able to do it with TaxAct.

Yes problem with TAXACT because it is forcing you to have wages in order to have withholding for that state. If you enter the same wage for MA as CT on the W2, I believe in one of the screens in the software you have to adjust (back out the wages) otherwise it will double it for MA.

MA will only credit taxes paid to another jurisdiction based on a calculation on a worksheet.It is NOT dollar for dollar credit always. Do the worksheet otherwise you will be looking at an Intent to Access Notice from MA.

I must correct half a dozen of these self prepared returns each year with MA/CT wages for MA residents.

[ruthc]

You're right.

Yes, I can enter the same wages for each state.. Then on the MA return do an adjustment to back out the MA wages that really should be -0-and then the wage numbers will come out ok. However, I've done this in the past and it had to be mailed, not e-filed. I was trying to avoid having to mail the return.

Now I entered $1 for MA wages and entered the amount that was W/H from MA even though that W/H number is higher than the $1 wage. I did the worksheet to get credit for the tax liability paid to CT. All looks good! When I did the e-file review a warning showed about the withholding, but the e-file was accepted but not submitted. After the client signs the appropriate approval I will submit the e-file and hope I don't get any error for it (although I expect it). If it shows an error, then I will have to do the W2s just like the ones the client received with each state showing the same wages. Then I will do the adjustment and have to have the client mail the return.

Thanks for your help. At least you confirmed my thinking on how to get by with the adjustment which I knew about. It's funny that other software handles it fine. Oh well, another day in paradise!!!

[ATSMAN]

Taxmom34 is correct. MA Form 1 line #3 should show the wage listed on box 16. If box 16 has both CT and MA same amount listed separately then an internal adjustment inside the software needs to occur otherwise Line #3 will be doubled. I believe most professional tax prep software allow you to adjust the state taxable wages.

You may need to call your software support line to see how that adjustment is done.

The final results should be a CT-1040 NR Form with CT wages taxed. A MA Form -1 with wages from MA and CT taxed and a credit for tax paid to other jurisdiction on line #30 based on a calculation in a separate worksheet because it is not always $ for $ credit.

[ruthc]

Correct, BUT

You are absolutely correct. And that is what I did. However, the problem is when I do that adjustment I can't e-file the MA return. It has to be mailed. That is what I don't like. But if that is what has to happen, it will. From what I can tell, this problem is with TaxAct. I spoke with them and that is what they said. I was hoping someone that uses TaxAct has found a way around this so we can e-file the return. If I change the wages to -0- for MA or even enter $1 for the MA wages, a warning comes up that it is not allowed because of having some withholding for MA.

Any other thoughts out there????

[ATSMAN]

I am not trying to insult TaxAct users, but if your software does not permit these types of adjustments which is generally required for multi state returns, it is time to dump TaxAct and get another professional tax software that allows multi state returns and adjustments.

It is totally ridiculous that you are forced to file paper in MA. Make sure you get the MA EFO form signed for paper filing.

[ATSMAN]

I use TaxACT and rarely, and without a darn good reason, start using overrides. And I can't rationalize deliberately changing information shown on a reportable tax document as a "solution."
Are you saying that if you enter from a single W2 input screen (maybe even try going the Q&A route?) for the CT income, and entering the federal wages in Box 1, and then entering two complete sets of "state" information (as shown on the relevant W2) in boxes 15-17, that the MA return is showing double the CT income? (I'll assume the Form 1040 numbers are not presenting a problem.)
If so, could you consider, somewhere in the MA return, making a line entry (with a suitable "title") to remove the duplicate "MA" income? You can also write a brief explanation, for clarification purposes, in the notes section of the efile transmission worksheet.
Another thing that you might need to do "up front" is look around the CT screen to be sure you are indicating, somewhere, the form to be used is the CT non-resident return.
Wish I could help more, but my clients are all far south / west of New England.
Good luck!

FE

I believe OP tried that and the box 15-17 figures are doubled in the MA return. Why don't you give it a try in TaxAct and see if there is any way to reduce the MA line #3 income to correctly reflect the taxable wage for MA and still be able to e-file. If I understand OP correctly TaxAct is preventing e-file if any adjustments are made to the state tax return.

[ruthc]

Agree!

I have a few new clients in MA that work in CT and it is getting to be a real pain just because of this issue. I am now changing my thought on what to try. I just did the W2's again with NO MA wages but with the withholding. So the total in wages is just for CT. But there are no wages showing for MA but with some withholding. The return looks fine along with the credit for the taxes paid to CT. I even went through the e-file process and it did go through without any problem. I did not actually submit it. I will wait until I get the client signs everything to submit. Then I will see what gets denied. If it does, I am just going to bite the bullet and do MA over again using the adjustment line and having to paper file that one. Wish me luck (although I really think it will reject it).

[ATSMAN]

I have a few new clients in MA that work in CT and it is getting to be a real pain just because of this issue. I am now changing my thought on what to try. I just did the W2's again with NO MA wages but with the withholding. So the total in wages is just for CT. But there are no wages showing for MA but with some withholding. The return looks fine along with the credit for the taxes paid to CT. I even went through the e-file process and it did go through without any problem. I did not actually submit it. I will wait until I get the client signs everything to submit. Then I will see what gets denied. If it does, I am just going to bite the bullet and do MA over again using the adjustment line and having to paper file that one. Wish me luck (although I really think it will reject it).

In TaxAct can you run the consistency check for e-filing to catch any errors and if it does not error out it is ready for submission?

If I read you correctly you deleted the MA wage on box 16 , but left the withholding on box 17 and it did NOT error out?

I think you may be good to go then. I doubt MA DOR will reject that. If there is any rejection it will be TaxAct!