taxes withheld from wrong state

[taxconfused]

What is the name of your state (only U.S. law)? SC/NC

Hello,

Several of the people in the office I work in, live in SC but work in NC. We found out that the taxes withheld from the past year or in some cases longer have been the wrong state. The company has been made aware and offered to send out new W2's but the accountants that these employers go to have advised them to ignore this and just file anyways.

It's my understanding that this would be considered tax fraud and that NC taxes are higher than SC taxes and that they would need to go back and get this corrected and pay past taxes that may be owed.

What is the correct legal action that is suppossed to be taken by the employer and the employee??

thanks!

 

[TinkerBelleLuvr]

Did you look at your paystubs?

You will have to file both NC taxes and SC taxes. You might get a refund from one and pay the other. It works out in the end.

 

[Dandy Don]

Talk to the state tax authorities about this or a local employment law attorney.

The fact that this company is not agreeing to issue new W2's could be a serious violation of law.

 

[LdiJ]

Talk to the state tax authorities about this or a local employment law attorney.

The fact that this company is not agreeing to issue new W2's could be a serious violation of law.

One reason why employers are reluctant to fix this sort of problem, is because its quite difficult for the employer to get a refund of taxes remitted to the wrong state after a year has already ended, and because its possible for the employees to fix it themselves by filing the appropriate state tax returns.

If someone works in NC, but lives in SC, they will owe non-resident income tax to NC, and resident income tax to SC. If resident tax was collected for NC, then they will get a big refund from NC and will owe SC. It should somewhat balance out.

However it should be insisted that the employer fix the problem for the future. The employer should be withholding NR tax for NC, and resident tax for SC.

 

[thedoctorisin]

Even if the employer does not fix the withholding, they should at least correct the state wages so that your W-2 shows the correct amount of wages earned in the correct state.