What I need to do If my employer doesnt deduct the tax in my W2 for the state where I reside?

Question

Hi,

I'm a software consultant, and I work in a state which is different from where my employer reside. He doenst do the tax deduction based on my state rather he does where the company reside.

My W2 wont reflect the tax for the state where I reside. I do have my license in the state where I reside now.

I have a few questions,

Can I file my state tax without W2 form?

Is it okay to file the tax only for the state where my employer reside not where I reside? (Since I'm a consultant)

Throw some light on this issue.

Answer 1

Your employer has made a mess, don't make it worse.

If you live in state A, you file in state A.  You pay taxes to state A.

If you work in state A and you did not work in state B--and state B is the state shown on the W-2, you need to file a non-resident return with state B and convince them that this is the case.  State B would then refund the taxes withheld.  

Answer 2

You are required to file tax for the state where you reside, unless either (a) it is one of the very few states without an income tax (Texas, Florida, Alaska, etc.), or (b) your total income is little enough not to be required to file state income taxes.

Some, but not all, states require a W-2 form, but you can file using whatever W-2 form you receive.  States with an income tax accept any W-2 form, even one that shows another state, as evidence of what their residents were paid.  Note that you claim only the income shown on that W-2, NOT the withholdings, when you file your home state's taxes.  However, if both states tax you on the same income, then you can claim a credit for taxes paid to one state on income also taxed by the other.

You should also file with the state whose taxes were withheld, and must do so if you worked in that state.  This is where you claim the withholdings.  If you did not work in that state, you will receive a refund of the taxes withheld that went to that state.  If you did work in this state, you should do its return first.  If it taxes you on income also taxed by the state where you reside, be sure to claim the applicable credit (see previous paragraph) on one of the state returns, usually your home state's return.