NC Claims W2 Reporting Incorrect
I work for a large consulting company. I am in the midst of a year long dispute with the state of North Carolin over my 2008 tax year income return. Here is what happened in 2008:
- From Jan 1 to Aug 1 I lived in Florida (no state taxes)
- Aug 1 I moved to North Carolina (now considered to be my home state with my consulting company)
- Aug 1 I also started traveling to Kentucky for project work there
My consulting company reported on my 2008 W-2 the following information:
- Nothing for the state of Florida
- For NC - All wages earned from Aug 1st through the end of the year (including the wages for hours worked while in Kentucky)
- For KY - All wages earned from Aug 1st through end of the year, but only for hours worked in Kentucky
So at this point NC includes all wages, both NC and KY from Aug 1st til the end of the year. Whereas KY only reports the wages for hours worked there.
I filed my return for NC indicating the dollar amount reported to NC and also filed a tax credit for the taxes paid to KY. This is where the dispute comes in.
The NC Dept of Revenue is fine with the tax credit being claimed but they are saying I need to add the KY W2 wages to the NC W2 wages to get my total taxable wages for NC. But this is WRONG, because the NC W2 wages already includes those dollars and if you add them together I am being taxed twice.
We have been going back and forth for over a year, culiminating in my HR deptartment getting involved, sending a certified letter explaining how my company reports earnings on the W2 and that the home state (NC in this case) has all hours reported to it while it is the home state. The NC Dept of Revenue simply replied and said that my company is reporting the W2 wrong and I need a W2-C corrected to show the amounts properly. Note that my company has over 20,000 employees in the state and is not reporting things "wrong".
What I need to get correct this, because my company isnt going to give me a corrected W2 when one is not needed, is to show the Dept of Rev at NC that they are wrong. I am looking for any IRS documentation that clearly states that all hours for multi-state employees should be reported to the home state.
Thanks for the help.