Indiana resident, received Ohio income from leftover sick pay question...

[luketj914]

Hi, I have a question. I worked at company A in Ohio and moved from Ohio to Indiana in December 2018. I quit company A on December 20th, 2018. I received unused vacation/sick pay on December 31st, 2018. Today I received a W2 for that final income (of the unused sick/vacation pay) payment amount from company A. I worked/lived all year in 2019 in Indiana and worked for company B. I understand I need to report both A and B w2s federally, but when it comes to state reporting, do I file only an Indiana state return? Or Ohio and Indiana? When I googled I found some documents here: https://www.in.gov/dor/files/ib28.pdf, that say Indiana has a reciprocal agreement with Ohio. I'm looking for clarification, but it seems like I would report that Ohio income on my Indiana return only?

 

[LdiJ]

Hi, I have a question. I worked at company A in Ohio and moved from Ohio to Indiana in December 2018. I quit company A on December 20th, 2018. I received unused vacation/sick pay on December 31st, 2018. Today I received a W2 for that final income (of the unused sick/vacation pay) payment amount from company A. I worked/lived all year in 2019 in Indiana and worked for company B. I understand I need to report both A and B w2s federally, but when it comes to state reporting, do I file only an Indiana state return? Or Ohio and Indiana? When I googled I found some documents here: https://www.in.gov/dor/files/ib28.pdf, that say Indiana has a reciprocal agreement with Ohio. I'm looking for clarification, but it seems like I would report that Ohio income on my Indiana return only?

On your W2, in box 15 does it say OH for Ohio or IN for Indiana? If it says OH for Ohio, Ohio will expect to see an Ohio tax return. I do agree however that you will count yourself a full year resident of Indiana. Therefore you would file an Ohio, non-resident return.

 

[luketj914]

The W2 from company A lists Ohio. The W2 from company B states Indiana. The more I try to google and read, the more confused I get. I too would imagine that Ohio is expecting a filed return, however given that I never lived there in 2019, the link above from Indiana department of revenue seems most accurate. It states: "Five states have a reciprocal agreement with the state of Indiana. They are Kentucky, Michigan, Ohio, Pennsylvania, and Wisconsin. All salaries, wages, tips, and commissions earned in these states by an Indiana resident must be reported as if they were earned in Indiana."

So I'm still a little confused.

 

[Zigner]

The W2 from company A lists Ohio. The W2 from company B states Indiana. The more I try to google and read, the more confused I get. I too would imagine that Ohio is expecting a filed return, however given that I never lived there in 2019, the link above from Indiana department of revenue seems most accurate. It states: "Five states have a reciprocal agreement with the state of Indiana. They are Kentucky, Michigan, Ohio, Pennsylvania, and Wisconsin. All salaries, wages, tips, and commissions earned in these states by an Indiana resident must be reported as if they were earned in Indiana."

So I'm still a little confused.

Your wages and W2 are for the year of 2018, right? If yes, then your 1099 should be for the tax year of 2018, not 2019.

 

[luketj914]

Your wages and W2 are for the year of 2018, right? If yes, then your 1099 should be for the tax year of 2018, not 2019.

Thats another reason I'm confused. I got the deposit at 3pm december 31, 2018...however this amount was given to me today as a W2 for 2019. The company I worked for was an India based company and our offshore payments come from there....so my best guess is since they are 10 hours ahead of us, they were in 2019 when they paid me. I really dont know though...its part of the reason im confused, because I didnt receive any money from them in 2019.

 

[LdiJ]

The W2 from company A lists Ohio. The W2 from company B states Indiana. The more I try to google and read, the more confused I get. I too would imagine that Ohio is expecting a filed return, however given that I never lived there in 2019, the link above from Indiana department of revenue seems most accurate. It states: "Five states have a reciprocal agreement with the state of Indiana. They are Kentucky, Michigan, Ohio, Pennsylvania, and Wisconsin. All salaries, wages, tips, and commissions earned in these states by an Indiana resident must be reported as if they were earned in Indiana."

So I'm still a little confused.

You won't end up paying both Ohio taxes and Indiana taxes on the W2 from company A. Because your resident state is Indiana, you will end up getting a refund of the Ohio withholding. The reason why you have to file the Ohio return is because Ohio won't know that you are an Indiana resident, until you tell them on the Ohio return.

You didn't include this money on your 2018 return, and while there is maybe an argument that it should have been treated as 2018 income, it was not, it was treated as 2019 income. Therefore, you should treat it as 2019 income.

 

[PayrollHRGuy]

Thats another reason I'm confused. I got the deposit at 3pm december 31, 2018...however this amount was given to me today as a W2 for 2019. The company I worked for was an India based company and our offshore payments come from there....so my best guess is since they are 10 hours ahead of us, they were in 2019 when they paid me. I really dont know though...its part of the reason im confused, because I didnt receive any money from them in 2019.

I'm assuming you received the payment via direct deposit. What you need to look at is the check date on the paystub. The paystub will show the date that is applied on your W2.

 

[luketj914]

I'm assuming you received the payment via direct deposit. What you need to look at is the check date on the paystub. The paystub will show the date that is applied on your W2.

So I logged into ADP which is what both companies I work for use and on December 31,2018 I received my unused sick pay as direct deposit and on that day in ADP it just says "adjustment" with everything totaling out to $0. Then on January 11, 2019 there is another "adjustment" with the amount I received on December 31st, 2018 with pay period beginning December 22, 2018 and ending on January 4, 2019 which says pay date January 11, 2019. I kinda get why it was counted as W2 wage for 2019, but it seems very fishy. If I received it in 2018, shouldn't that be 2018 income not 2019? or does it go whatever they feel like specifying in their payroll despite when I actually receive the money?

 

[luketj914]

And on that note, I suppose that means I must file an Ohio non resident return since I moved from Ohio before that pay period even began?

 

[Zigner]

And on that note, I suppose that means I must file an Ohio non resident return since I moved from Ohio before that pay period even began?

That's what it sounds like. As pointed out by LdiJ above, this won't affect the actual amount of taxes you have to pay, but it will make your filing for the year a little more complicated

 

[luketj914]

Thank you all for your replies and time. I appreciate it.

 

[PayrollHRGuy]

on December 31,2018 I received my unused sick pay as direct deposit and on that day in ADP it just says "adjustment" with everything totaling out to $0.

That means it wasn't reported on your 2018 W2.

Then on January 11, 2019 there is another "adjustment" with the amount I received on December 31st, 2018... which says pay date January 11, 2019.

That means it was for W2 purposes a 2019 payment.

If I received it in 2018, shouldn't that be 2018 income not 2019? or does it go whatever they feel like specifying in their payroll despite when I actually receive the money?

It likely should have been 2018 but someone screwed up along the way. Not unusual at the end of the year especially with ADP or as it is lovingly known in the payroll business Another Damn Problem.